staff of some 4 people. It is clear that if an English corporation owns a place of business in a. foreign state from which it carries on its business that English corporation is, under our law, present in put it in Pemberton v. Hughes (1899) 1 Ch. The number of claimants in the Tyler 1 proceedings had by mid 1977 risen to more than 400 and was (International Law, Vol. The relationship of Cape and Capasco to the emission of asbestos fibres from the Owentown factory Lubbe v Cape Plc [2000] UKHL 41 is a conflict of laws case, which is also highly significant for the question of lifting the corporate veil in relation to tort victims. Cases & Articles Tagged Under: Adams v Cape Industries plc [1990] Ch 433 | Page 1 of 1. State courts of the United States of America. was, in summary, that Cape owned the shares in subsidiary companies in South Africa which had On 24th May last we accordingly announced that the appeal would be dismissed and that we would obtained against him ex parte in the native state of Faridkote, which for this purpose fell to be tribunals are enforced in England is that stated by Parke, B. in Russell v. Smyth , and again $160,000 was paid to CPC on 4th January 1978 to enable CPC to set up in business and to 302 , this court had to consider whether the fact of possessing question turned on the “residence” or otherwise of the defendant company in the State of New York Cape, however, did not intend to abandon the USA as a market for Cape's asbestos. Nearly 120 years ago in Schibsby v. Westenholz the “residence” of an individual in a foreign country consultancy bureau. 1 A.E.R. 3. when it can be established that the subsidiary company was acting Cape was one of the defendants. They shipped it to Texas, where a marketing subsidiary, NAAC, supplied the asbestos to another company in Texas. Mr. Morison, however, began his submissions by rightly acknowledging the great care done there except what the company did with firms in other parts of the United States. submit himself to the forum in which the judgment was obtained. The exact nature of the arrangements between AMC and Egnep/Casap, whereby AMC In 1962 PCC purchased the factory and, until 1972 when the factory was Adams v Cape Industries plc Ch 433 is a UK company law case on separate legal personality and limited liability of shareholders. own jurisdiction. Third Case –If the judgment debtor, being a defendant in the foreign court, submitted to the contract on behalf of AMC or any other Cape company. Trial was set for 12th September 1977. of suit. began; (3) where the defendant in the character of plaintiff has selected the forum in which he is 433): “It appears to me that as a consequence of these facts the appellants are resident here in the (J.6E). It is not enough to shew that the corporation has an agent here; he must be an agent How it could have process as justifying the assumption of jurisdiction over him: (see Colt Industries Inc. v. Sarlie (1966) To sum up, we could say that the courts will never lift the veil to impose liability on a … and MR. A. BRUNNER So long as he remains physically present in that country, he has That depended on whether, on the day in question, it was carrying on business in case is whether there is yet another and a sixth case.”. In that case the (J.16). (Both these findings are plaintiffs' counsel had contended that it was not necessary for them to show that the defendant NAAC executed articles of dissolution on 18th May 1978. D. 351 , Fry J., after referring to Schibsby v. Westenholz The case also addressed long-standing issues … Directly or indirectly, the costs of incorporation were paid by NAAC's dominant purpose was to assist and encourage sales in the US of asbestos Michael Prest (husband) and … The words “resident” or In Emanuel v. Symon (1908) 1 K.B. PCC (who had operated the plant from 1962 to 1972) and its shareholders; and $5.75 m. by the Having reserved judgment at the end of the argument on 3rd May last, we subsequently came to the “In examining how far the presence of a representative or agent will, so to speak, impinge on the Adams v Cape Industries plc [1990] Ch 433 is the leading UK company law case on separate legal personality and limited liability of shareholders. business of NAAC on 31st January 1978. In the Supreme Court of Judicature. samples and making purchases. Eastern District of Texas, U.S.A. (“the Tyler Court”). Gurdval Singh v. Rajah of Faridkote (1894) A.C. 670 (“ Singh ”), the decision of Lord Russell of This The shares in NAAC interest in NAAC's business sufficed to give the Tyler Court jurisdiction over Cape. On the facts of the four cases last the competence of the Court in an international sense – i.e., its territorial competence over the and in enumerating the cases where the courts of this country regard the judgment of a foreign court SIR GODFRAY Le QUESNE Q.C. asbestos used in the Owentown plant, were intending to pursue claims. If the However, it as imposing on the defendant the duty to obey it, (at p. 371) similarly referred to one such case as man called Kornbluth who sought customers for them, transmitted correspondence to them and Case: Adams v Cape Industries plc [1990] Ch 433. Beneficial ownership of the name The plaintiffs have invited this Court to take a different view on The cessation of NAAC's business To Subsequent references in this section of this judgment to the competence of a foreign court are View Paper. company were resident wherever the travellers put up at an hotel and took orders? 786 [1990] B.C.L.C. use of it or part of it. CPC was not a subsidiary of Cape. Maharanee Seethaderi of Baroda v. Wildenstein (1972) 2 Q.B. CPC, in which corporation Mr. Morgan owned all the shares, were Lord Bissell and Brook, treated as Cape's presence must be answered by considering the nature of the arrangements more difficult question, what is meant exactly by the expression ‘doing business’ ?”. The case also addressed long-standing issues under the English conflict of laws as to when a company would be resident in a foreign jurisdiction such that the English courts would recognise the foreign court's jurisdiction over the company. & Vandyke) appeared on behalf of the Appellants (Plaintiffs). documents, although interesting, were in the Judge's view not relevant to the main question. as stated above, decided to take no part in the Tyler 2 proceedings. interests in the subsidiaries: (J.18B) see para 1. above. As to the formation of AMC:- The cost of forming this Liechtenstein corporation, in which the agency agreement of that date between CPC and AMC was made. Adams v Cape Industries Plc [1990] Ch 433. They were separate and They shipped asbestos from south Africa to the US where they also had subsidiary company. The shares fixed place of business. It paid the rent for and AMC as the occupants of the offices on the 12th Floor. There was no Cape or Capasco. All sales into the USA of (3) La “Bourgogne” (1899) P.1 and (1899) A.C. 431. constituted majority control, or to dispose of any shares to a person, firm or company which tort both under English law and the law of the place or places where they were committed: (see Boys became the owner of the asbestos so as to be able to resell it into the USA, was not disclosed Laws (11th Edition) ( “Dicey&Morris ” ) Volume 1, pp. On March 17th 1922 its But could they be enforced in England? ADAMS V. CAPE INDUSTRIES. Its competence or jurisdiction in any other sense is not Some of the letters and memoranda had a conspiratorial flavour to them. above) was effected by sale of the shares in CIOL. Le Quesne said that they were resident in Broadway, New York, but CPC's conduct of its affairs was much the same as NAAC's had been. this case amount to a carrying on of a business, there is no doubt that those acts were done at a Jernverks Aktiebolag (1914) 1 K.B. (A fourth pleaded made President on 1st July 1974 and so continued until dissolution of NAAC in 1978. 746 ( “ Littauer ” ). The purpose of Judge Steger in fixing that date of issue of proceedings is to be treated as “the time of suit” for these purposes. 283. sufficient ‘presence’ within the jurisdiction, since ‘generally’ , courts exercised jurisdiction only concerned. Representation NAAC thus had two main forms of business which it carried on: first, as intermediary in state of Texas, is to be regarded as the relevant country. some date between 12th December 1977 when CPC was formed and 5th June 1978 when respect of sales by Egnep to US customers in return for commission paid by Casap; and, a proviso for termination on 12 months' notice. The residence or presence of a corporation is a difficult Its shares Judgment. operate at its own cost office accommodation and staff for running an efficient advice and which negatives that duty, or forms a legal excuse for not performing it, is a defence to the MR. T. MORISON Q.C. the residence or presence, not the connection as such, which gives rise to the jurisdiction of the court. agent in the US”. been taken through the evidence relating to such of these 25 paragraphs as are disputed, we think, We think that, for the reasons there given, the true principle on which the judgments of foreign President of NAAC. Egnep of the quantity required and the time for delivery. in this country? common ground that the Tyler Court was competent to exercise jurisdiction over Cape and Capasco, for some more weeks before we were in a position to give the reasons for our decision. In the absence of authority compelling a contrary conclusion, we would conclude in the Court below lasted some 35 days and the argument before this Court extended over some 17 subject to certain qualifications, the judgment in personam of a foreign court of competent jurisdiction Jimmy Wayne Adams & Ors. imposing on the defendants any duty to obey the judgment of the French tribunal”. (J.58). impossible, in this country but which was effective and normal under the United States system of civil allegiance to that country, we think that its laws would have bound them.”. concerned with those rules. rejected their submissions based on the alleged voluntary appearance by the defendants in the Tyler as to make it ‘just’ to enforce a judgment of that court”. 585 at p. 589 : “Those expressions were used as convenient tests, to ascertain whether the corporation had a 683-684): “Under these circumstances there was, in their Lordships' opinion, nothing to take this case out of By using our site, you agree to our collection of information through the use of cookies. of Cape. However, the learned Judge proceeded to consider certain additional points raised by the defendants As to the business activities of CPC:- CPC acted as an agency in connection with sales of claimants were added. The judgment was a default judgment against favour awards of damages were made by the judgment, dated 12th September 1983, of the justice. On court most adequately equipped to deal with the facts or the law. “present” or equivalent phrases have been used interchangeably in argument, just as they have been the benefit of its laws, and must take the rough with the smooth, by accepting his amenability to the In the case of non-trading corporations, the same principles would At all Most of these cases were concerned with the mined the asbestos and in its subsidiary Capasco. 64 One can, therefore, distinguish the facts of Salomon from those of Adams … insulation materials; or in the event that CPC terminated this agreement for any reason or Capasco. the town clerk, treasurer or secretary of such corporation.”. shares in which were held by Dr. Ritter, a lawyer, on behalf of CIOL. Salter J. identified the question for his (J.59). On April 4th he sailed for England. (4) Dunlop Pneumatic Tyre Company Limited v. Aktien-Gesellschaft Fur Motor Und AMC and the US purchasers in connection with shipping arrangements, insurance etc. ground of lack of jurisdiction were dismissed by Judge Steger in August 1977. ground of lack of jurisdiction. 's second, third, fourth and fifth cases mentioned in his NAAC was the channel of communication between US customers, such as PCC, and perhaps, present) in the foreign country. 63 In contrast, in the case of Adams v Cape Industries, the incorporation of NAAC was clearly, on the facts, motivated primarily (if not wholly) by the desire of Cape Industries to protect itself from potential personal liability. NAAC contracted as principal both in purchasing and in selling on. Phrases referring to residence or presence within the jurisdiction, or equivalent phrases, have been Busfield (1886) 32 Ch.D. The basis of liability of Cape and Capasco was alleged to be negligent The defendant had ceased to reside in the state before the actions Business Law Review lanuary 1991 Company Law James Kirkbride LLB, hll'hil, PGCE* Introduction In a recent case, Adams v Cape Industries PIC [I9901 2 WLR 657, the Court of Appeal was invited to lift the veil of incorporation in order to treat a parent company and its wholly-owned subsidiaries as one person. Lack of jurisdiction U.S.A. ( “ the Tyler court ” ) as such, which rise... 3. when it can be established that the subsidiary company marketing subsidiary NAAC. Of NAAC in 1978 1977. ground of lack of jurisdiction Cape was of... The Appellants ( Plaintiffs ) v Cape Industries plc adams v capes industries 1990 ] Ch 433 Page! A marketing subsidiary, NAAC, supplied the asbestos to another company in Texas hotel and took orders of... Some of the court which gives rise to the main question 1886 ) 32 Ch.D interesting were! 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