Must Read
Lee v. Lee’s Air Farming, Ltd. (1960)
- Get link
- X
- Other Apps
Introduction
This case is of "Newzealand" related to "Separate legal entity" has an indispensable role in the Indian company's act to understand the concept of the distinct personality of the Company.
Facts of the Case
'L' formed the respondent company to carry on the business of aerial top-dressing.
The nominal capital of the company was 3,000 pounds. 'L' was allotted 2,999 shares and he was appointed governing director of the respondent company and under Article 33 of the articles of the association was employed as chief pilot of the company. 'L' exercised full and unrestricted control of the company affairs. A different form of insurance cover for the benefit of the respondent company and certain personal accident policies were taken out in favor of 'L', who was a duly qualified pilot. L was killed while piloting the aircraft during aerial top dressing.
The appellant claimed compensation under "the New Zealand Workers Compensation Act, 1922".
Appellant contention
- As mentioned in section 3(1) of the Companies Act, 1922: if personal injury by accident arises in the course of any employment, the company is liable to compensate.
- He was paid wages for his employment, the record has been kept in the company's wage book.
Respondent contention
- The respondent company denied that the deceased was a 'worker' within the meaning of "the Workers Compensation Act, 1922".
- The denial was based on the fact that the deceased was, at the time of the accident, the controlling shareholder and government director of the respondent company.
Issue
Ratio Decidendi
- No director shall be disqualified by his office from holding any office or place of profit under the company.
- "Salomon v Salomon Co. Ltd,1897":
- one person may function in dual capacities.
- "Indian Revenue comes. V Sansom , 1921" :
- the company was a properly constituted legal entity, it had the power to make plans for such persons and on such terms as it should think fit.
- " Fowler v Commercial Timber Co. Ltd, 1930" :
- the plaintiff can hold two positions; first, as a managing director, who claimed damages for breach of the contract of employment, and 2nd as a director and shareholder of the company who thinks that in its own interest, the company ought to stop business.
- In the present case, there is no reason to doubt that a valid contractual relationship could be created between the respondent company and the deceased.
- A man acting in one capacity can make a contract with himself in another capacity.
- The respondent company and the deceased were the Separate entity.
- Any profit earned would belong to the respondent company and not to the deceased.
- Appeal allowed.
- The deceased was a worker under the Workers Compensation Act.
Also Read:- Salomon v. Salomon & Co. Ltd. 1897
- Get link
- X
- Other Apps
Comments
Post a Comment