''Lee v Lee's Air Farming Ltd''
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UKPC 33is a company law case from New Zealand, also important for UK company law and Indian Companies Act 2013, concerning the corporate veil and separate legal personality. The Judicial Committee of the Privy Council reasserted that a company is a separate legal entity, so that a director could still be under a contract of employment with the company he solely owned.
Facts
Catherine Lee's husband Geoffrey Lee formed the company through Christchurch accountants, which worked in
Canterbury
Canterbury (, ) is a cathedral city and UNESCO World Heritage Site, situated in the heart of the City of Canterbury local government district of Kent, England. It lies on the River Stour.
The Archbishop of Canterbury is the primate of ...
, New Zealand. It spread
fertiliser
A fertilizer (American English) or fertiliser (British English; see spelling differences) is any material of natural or synthetic origin that is applied to soil or to plant tissues to supply plant nutrients. Fertilizers may be distinct from ...
s on farmland from the air, known as
top dressing
Aerial topdressing is the aerial application of fertilisers over farmland using agricultural aircraft. It was developed in New Zealand in the 1940s and rapidly adopted elsewhere in the 1950s.
Origins
Previous aerial applications
The firs ...
. Mr Lee held 2999 of 3000 shares, was the sole director and employed as the chief pilot. He was killed in a
plane crash
An aviation accident is defined by the Convention on International Civil Aviation Annex 13 as an occurrence associated with the operation of an aircraft, which takes place from the time any person boards the aircraft with the ''intention of fl ...
. Mrs Lee wished to claim damages of 2,430 pounds under the ''Workers' Compensation Act 1922'' for the death of her husband, and he needed to be a 'worker', or 'any person who has entered into or works under a contract of service... with an employer... whether remunerated by wages, salary or otherwise.' The company was insured (as required) for worker compensation.
The
Court of Appeal of New Zealand
The Court of Appeal of New Zealand is the principal intermediate appellate court of New Zealand. It is also the final appellate court for a number of matters. In practice, most appeals are resolved at this intermediate appellate level, rather t ...
said Lee could not be a worker when he was in effect also the employer. North J said
959
Year 959 ( CMLIX) was a common year starting on Saturday (link will display the full calendar) of the Julian calendar.
Events
By place
Byzantine Empire
* April - May – The Byzantines refuse to pay the yearly tribute. A Hungari ...
NZLR 383, 399 "the two offices are clearly incompatible. There would exist no power of control and therefore the relationship of master-servant was not created."
Advice
The Privy Council advised that Mrs Lee was entitled to compensation, since it was perfectly possible for Mr Lee to have a contract with the company he owned. The company was a separate legal person.
Lord Morris of Borth-y-Gest said:
See also
*''
Salomon v. A. Salomon & Co. Ltd.''
*''
DHN Food Distributors Ltd. v. Tower Hamlets London Borough Council''
*''
Adams v. Cape Industries plc''
Notes
{{DEFAULTSORT:Lee V. Lee's Air Farming Ltd.
United Kingdom corporate personality case law
United Kingdom company case law
Judicial Committee of the Privy Council cases on appeal from New Zealand
1960 in case law
1960 in New Zealand law