Ord v Belhaven Pubs Ltd
Encyclopedia
Ord v Belhaven Pubs Ltd [1998] 2 BCLC 447 is a UK company law case concerning piercing the corporate veil
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about the level profitability of the pub. However Belhaven Pubs Ltd was part of a company group 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.
Hobhouse LJ also held, specifically, that the earlier case of Creasey v Breachwood Motors Ltd
was wrong.
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 or directors. Usually a corporation is treated as a separate legal person, which is solely responsible for the debts it...
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Facts
Mr and Mrs Ord ran the Fox Inn in Stamford, Lincs. They were in an ongoing dispute with the freehold owner, Belhaven Pubs Ltd, for misrepresentationMisrepresentation in English law
Misrepresentation in English law is an area of English contract law, which allows a person to escape a contractual obligation or claim compensation for losses. If one person can show that she entered an agreement because of another person's false assurances, then the other person will be unable to...
about the level profitability of the pub. However Belhaven Pubs Ltd was part of a company group 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 judge 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
Creasey v Breachwood Motors Ltd
Creasey v Breachwood Motors Ltd [1993] BCLC 480 is a UK company law case concerning piercing the corporate veil.-Facts:Mr Creasey was dismissed from his post of general manager at Breachwood Welwyn Ltd. He claimed that this constituted wrongful dismissal, in breach of his employment contract...
was wrong.