''Ord v Belhaven Pubs Ltd''

998 Year 998 ( CMXCVIII) was a common year starting on Saturday (link will display the full calendar) of the Julian calendar. Events By place Europe * Spring – Otto III retakes Rome and restores power in the papal city. Crescenti ...

2 BCLC 447 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 legal ...

case concerning

piercing the corporate veil Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a separate legal person, which is so ...

Facts

Mr and Mrs Ord ran the Fox Inn in

Stamford, Lincolnshire Stamford is a town and civil parish in the South Kesteven District of Lincolnshire, England. The population at the 2011 census was 19,701 and estimated at 20,645 in 2019. The town has 17th- and 18th-century stone buildings, older timber-framed ...

. They were in an ongoing dispute with the freehold owner, Belhaven Pubs Ltd, for

misrepresentation In common law jurisdictions, a misrepresentation is a false or misleading '' R v Kylsant'' 931/ref> statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. The m ...

about the level of profitability of the pub. However Belhaven Pubs Ltd was part of a

company group A corporate group or group of companies is a collection of parent and subsidiary corporations that function as a single economic entity through a common source of control. These types of groups are often managed by an account manager. The concept ...

structure that had been reorganised, and had no assets left. Mr and Mrs Ord requested that a company with money, Ascott Holdings Ltd, be substituted for Belhaven Pubs Ltd to enforce the judgment. At first instance the judge granted this order. Belhaven Pubs Ltd appealed.

Judgment

The Court of Appeal overturned the judgement and held that the reorganisation was a legitimate one, and not done to avoid an existing obligation. Hobhouse LJ argued that the reorganisation, even though it resulted in Belhaven Pubs Ltd having no further assets, was done as part of a response to the group's financial crisis. There was no ulterior motive. Hobhouse LJ also held, specifically, that the earlier case of '' Creasey v Breachwood Motors Ltd'' was wrong.

Notes

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References

* United Kingdom company case law United Kingdom corporate personality case law Court of Appeal (England and Wales) cases 1998 in case law 1998 in British law

Facts

Judgment

See also

Notes

References