DHN v Tower Hamlets LBC
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''DHN Food Distributors Ltd v Tower Hamlets London Borough Council'' 9761 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 Directive (European Union), Directives and court cases, the co ...
case where, on the basis that a company should be compensated for loss of its business under a compulsory acquisition order, a group was recognised as a single economic entity. 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'' and qualified in '' Adams v Cape Industries plc''.


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 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 down to the North Sea, and has been a ma ...
. 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 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's judgment went as follows. Goff LJ concurred and read his judgment. Shaw LJ concurred with both judgments, and concluded with the following. 9761 WLR 852, 867-868


See also

*
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 Directive (European Union), Directives and court cases, the co ...
*'' R&B Customs Brokers Ltd v United Dominions Trust Ltd'' 9881 WLR 321, Dillon LJ suggests that the corporate veil could be lifted to identify a business as a consumer.


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