''DHN Food Distributors Ltd v Tower Hamlets London Borough Council'' 9761 WLR 852 is a

UK company law British 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 company is th ...

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 An economic entity is one of the assumptions made in generally accepted accounting principles. Almost any type of organization or unit in society can be an economic entity. Examples of economic entities in accounting are hospitals, companies, m ...

. 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 ''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 ...

''.

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 city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...

. 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, also known as Tower Hamlets Council, is the local authority for the London Borough of Tower Hamlets in Greater London, England. It is a London borough council, one of 32 in London. The council has been under ...

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

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 United Kingdom 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