Commercial Law

Regards to R v Francis

Keryy Francis has transferred his business into a company to become a separate legal entity (As per Companies ACT 1993 Section 15) The formation of the company is the creation of separate legal entity hence the companies assets are separate from its shareholder / director’s assets and liability The reason behind transferring his business into the company is to avoid himself from being liable for any obligation and protect his assets under the umbrella of the corporate law, therefore his company becomes accepted under the law of “Corporate Veil” which is a legal metaphor that created an invisible barrier between the shareholder / director of the company and the outside world And I believe that Kerry was trying to follow the same concept of Salomon V Salomon’s case to keep him self safe, however Kerry has been convicted of offence under the Misuse Act which means the court should lift corporate veil of his company The court needs to look behind the corporate facade and identify the nature of Kerry’s business; if the court felt that kerry is trying to cover him self behind the company to run illegal deals then the court must lift the corporate veil A similar case to Kerry Francis was Jones v Lipman [1962] 1 All ER 442: Russell Jones said that the defendant company is the creature of the first defendant a device and a sham, a mask which holds before his face in an attempt to avoid recognition by the eye of the equity On the other hand: an opposite case for Re Securitibank Ltd (no. 2) [1978] 2 NZLR 136 (CA). The New Zealand court of appeal decided not to lift the corporate veil because there is no evidence of fraud or sham, which is not in Kerry’s case In Conclusion:

Kerry has setup a company to run his illegal business and cover him self under the corporate veil, however the court should look behind the corporate facade and identify the nature of the business and lift the corporate veil on his company and order a forfeiture of Kerry’s vehicle which is used for offence under Misuse of drugs ACT. Wood Treatment Services ltd (attribution) We need to identify whether the company is alone liable, the directors of the company are only liable or both the directors & company are liable First, Wood Treatment Services company is a separate legal personality (S. 15 of Companies ACT 1993), but its an artificial person and it can only act though Human such as a director who has the full power to manage the business (S. 128) So in order to resolve this issue we need to apply the rules of attribution and see if we should apply primary rules, general rules or specific rules

The company should fall-in the specific rules because the company didn’t breach the primary or general rules, I believe the leaking and damage of the chemicals was not due to neglect by the director or employees, it‘s an environmental disaster hence the directors of the company are not liable , only the company is liable for the damage. Such as the case of Meridian Global funds management Asia V The Security Commission [1995] 3 WLR 413, where the Lord Hoffman had developed the concept of Special Rules of attribution that are used to decide whether an action is to be counted as an action of the company. Where the court must fashion a special rule of attribution. Another similar case is Trevor Ivory v Anderson [1992] 2 NZLR 517. The director of the company (Trevor) escaped personal liability for the tort of negligent where Trevor ordered to spray the raspberries without warning Anderson.

Trevor claimed that his advice was the advice of the company not his personal advice hence only the company is liable. Quick Courier Ltd I believe the company itself is liable for the damage which was caused by one of its employee (Marina), under the general rules of attribution; the company is being Vicariously Liable hence the customer can recover the cost from the company, this is called “Doctrine of Vicarious Liability” as per Watson Text book 6. 05. 2, the employee is directly liable and the company is indirectly liable , however if the employee has damaged the package outside the normal activity (e. g. employee went to visit her family) then the employee is only liable for the damage and not the company.