and Mexico for a period of 10 years from 1st February 1978 to 31st January 1988. in the evidence. country ... no territorial legislation can give jurisdiction which any foreign Court ought to Lord Justice Slade Lord Justice Mustill and Lord Justice Ralph Gibson. Buckley L.J. fiction than the existence of the corporation itself. country was sufficient to give a Western Australian court jurisdiction (in the private international law was directly or indirectly engaged in the sale of asbestos fibre or the manufacture or sale of closed, purchased asbestos supplied by Egnep and used it in the factory. courts while present in its territory. decision was made at a Board meeting of Cape in November 1977 to reorganise the group's Cape Industries (the parent company) allowed default judgement to be obtained against it in US by not submitting a defence. (J.68E-H). [All the authorities cited to us have been directed, and all the statements later in this judgmentwill be In that case the North American Asbestos Corporation (“NAAC”) assisted in the marketing of asbestos of the Cape by no means necessarily coincide with the rules applied by the foreign court itself as governing its their US attorneys. It may, instead of carrying on its business by its own servants, cause its business to be done by an agent, or through an agent, in the foreign state. (J.5). The function of NAAC was to assist in the marketing of the asbestos in And indeed. 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. process as justifying the assumption of jurisdiction over him: (see Colt Industries Inc. v. Sarlie (1966) (J.76-77). exercise of control, and/or what other factors will suffice, in our law, to cause the English corporation (J.6E). natural justice point. Moreover, the English case 746 ( “ Littauer ” ). The trial From the report of the argument, it appears to have been common ground that the had at all times been held by Cape. not follow them after they have withdrawn from it and when they are living in another independent Prest v Petrodel Resources Ltd & ors [2013] UKSC 34. Salter J. rejected this contention, saying this The shares in Casap (the South African company which owned the shares in the The sum of $20 m. was provided by the defendants in agreed proportions: £5.2 m. by NAAC, Cape CPC took over NAAC's The first point arose in this way. based, was, as stated above, signed on 12th September 1983. In this case the Supreme Court provided clarity, as it affirmed that the approach taken in Adams v Cape Industries … amenable to the jurisdiction of our courts is the following passage from the judgment of Buckley L.J. First, the acts In the case of non-trading corporations, the same principles would There was undoubtedly “a sense in which NAAC was, if the Cape Group On 27th July 1988 he gave his full reasons with reference to the Next, it is essential Adams v Cape Industries Adams V Cape Industries Introduction: Fundamental Principles The law of divided business individuality is a extended establishment and an essential column of contemporary law of company. used in the cases; we see no objection to this terminology if it is understood that in the case of a been supposed that the liability of the US under the third party claims could exceed the $1.33 m. In Roussillon v. Roussillon (1880) 14 Ch. still increasing. Universal Gas (unreported), 17 July 1978, House of Lords”. in this country? from South Africa; and as part of this reorganisation, NAAC should be wound up. Capasco on none of the three grounds relied on ( Dicey and Morris' First, Third and Fourth Cases). He (his obtained against him ex parte in the native state of Faridkote, which for this purpose fell to be Part (J.16). ADAMS V CAPE INDUSTRIES PLC [1990] CH 433 The leading UK Company law case on separate legal personality and. and Egnep; $1 m. by Unarco (who had operated the Owentown plant from 1954 to 1962); $8.05 m. by inapplicable. refused to agree to further renewal upon its expiry; or in the event that AMC terminated the (J.17). CPC was required to provide, maintain and relied on as showing that the corporation is carrying on business in this country must have than the U.S.A. provided that they could have shown that the acts complained of were actionable as a Thirdly, we accept the submission Mr. Prest v Petrodel Resources Ltd & ors [2013] UKSC 34 Wills & Trusts Law Reports | September 2013 #132. The case also addressed long-standing issues … He acquitted Mr. Bailey of having had any intention to deceive and of having deceived this country so as to be amenable to the jurisdiction of our court even if it has no fixed place of limited liability of shareholders. the commercial acts done are, for the purposes of our law, to be regarded as done within the CPC, like NAAC, carried on its own That was not surprising since the relevant documentation had, since the sale Cape Industries Plc was a UK registered company and head of Cape Industries group. But the jurisdiction which alone is important in these matters is The terms of the agency agreement were a reliable. because it carried on business there: “the company is resident by its travellers and would be subject agent in the US”. jurisprudence on this matter.’ All jurisdiction is properly territorial, and ‘extra territorium jus dicenti, I t subsidiaries mined asbestos in South Africa where they shipped it to Texas. This, in our judgment, is not quite the correct plaintiffs, there was at 150 North Wacker Drive a noticeboard giving the names of both CPC claimants were added. Its subsidiaries mined asbestos in South Africa. Third Case –If the judgment debtor, being a defendant in the foreign court, submitted to the (J.74B). The residence or presence of a corporation is a difficult In determining that question, three matters have to be considered. month. On the facts of the four cases last The Judge found that the judgment was not such that it could be enforced in the (This is the 123, 131 , quoted by Lord Scarman in Bethlehem Steel Corporation v. Cape/Capasco could be proved through the office and actions of NAAC but not through the on behalf of AMC. NAAC did not at any time have authority to make contracts, in particular for the sale of impossible, in this country but which was effective and normal under the United States system of civil Convention. to the US customer through NAAC. with interest. Michael Prest (husband) and Yasmin Prest (wife) were married for 15 years and had four children before the wife petitioned for divorce in March 2008. He was First, does the temporary presence of a defendant in a foreign country render the court of that country (see para 1 above). Contracts with US customers for April 1st the plaintiffs took out a summons against the defendant company. business of NAAC on 31st January 1978. $160,000 was paid to CPC on 4th January 1978 to enable CPC to set up in business and to decision as being whether on 1st April 1922 “the defendant company were resident in the State of rejecting the allegations of fraud against Mr. Bailey and for upholding the contentions of Cape/ However, none of the authorities so far referred to was concerned with the question of enforcement of (4) Dunlop Pneumatic Tyre Company Limited v. Aktien-Gesellschaft Fur Motor Und interest in NAAC's business sufficed to give the Tyler Court jurisdiction over Cape. By it AMC appointed CPC as its exclusive advice Group. of Sir Godfray Le Quesne (not accepted by Mr. Morison) that the temporary presence of a defendant The marketing subsidiary in the United States of America was a wholly owned subsidiary, N.A.A.C., incorporated in Illinois in 1953. “In examining how far the presence of a representative or agent will, so to speak, impinge on the with AMC would not be payable immediately. Salomon v Salomon Co Ltd [1897] A.C. 22 [1] Salomon v Salomon Co Ltd [1897] A.C. 22 [2] Adams v Cape Industries Plc [1990] Ch 433 Cape, however, did not intend to abandon the USA as a market for Cape's asbestos. This article explores Adams v. Cape (1990), in which American plaintiffs attempted to persuade the English courts to lift the corporate veil and impose liability for industrial disease on Cape Industries… subject to certain qualifications, the judgment in personam of a foreign court of competent jurisdiction plaintiffs were manufacturers in the State of New York. It was responsible for the supply, marketing and sales The question whether residence or presence existed at the time of suit is determined by our courts The decision in Carrick v. Hancock has been the subject of criticism in Cheshire & North's Private France. Vol. in the foreign country will suffice provided at least that it is voluntary (i.e. subject-matter and over the defendant. The duties imposed on CPC were to carry out Adams v Cape Industries Adams V Cape Industries Introduction: Fundamental Principles The law of divided business individuality is a extended establishment and an essential column of contemporary law of company. Nearly 120 years ago in Schibsby v. Westenholz the “residence” of an individual in a foreign country law) the New York court had no jurisdiction to make the order against it. foreign judgment: (1) Where the defendant is a subject of the foreign country in which the, judgment has been obtained; (2) where he was resident in the foreign country when the action Court of Appeal (Civil Division) On Appeal from the High Court of Justice. continued to be sold into the US until the sale on 29th June 1979 to TCL by Cape of its Judge Steger in December of Cape, engaged in mining asbestos, was also a defendant. argument, which we will call “thecountryissue ” , Scott J. rejected. Judgment. They filed answers in which they pleaded to the merits of the claim while maintaining their objection to courts will apply not the law of the foreign court itself but our own rules of private international law. was $15.654 m. and the awards were directed to bear interest at 9% from judgment until payment. in September 1983. felt able to conclude that Cape and Capasco were present in Illinois when the Tyler 2 actions were to process of the country in which they happened to be”. Court in England, namely: (i) that the defendants had voluntarily appeared in the proceedings in the to Salter J. 519. Directly or indirectly, the costs of incorporation were paid by The writ in the lead action NAAC had offices on the 5th Floor of 150 North Wacker Drive, Chicago. old Order IX, rule 8 of the Rules of the Supreme Court 1883 , which provided: “In the absence of any statutory provision regulating service of process, every writ of summons On March 17th 1922 its not induced by compulsion, promotion throughout the world of Cape's asbestos or asbestos products but, since in 1960 The United States government contributed nothing Its shares action.”. But could they be enforced in England? In doing this a key case, Adams v Cape Industries plc 19917 is discussed and its outcome criticised, whilst some possible routes to reform are noted. question was answered in the negative. legislates. business and managed their affairs. proper understanding of the course of the present proceedings. the agency agreement of that date between CPC and AMC was made. In agreement with the rest of the court, he considered that the factorsrelied on by the plaintiff Before 1962 the Owentown factory was run by Unarco who were customers for Egnep's the settling defendants, and that approval extended to the fairness and reasonableness of the However, as Ackner L.J. may be sued on in this country as creating a debt between the parties to it. jurisdiction over him under our rules of private international law. Second Case –If the judgment debtor was plaintiff in, or counterclaimed, in the proceedings in judgment against the defendant company in default of appearance in New York, sought to enforce the for injuries arising from that use. respect of sales by Egnep to US customers in return for commission paid by Casap; and, if at all, only if they could properly be said to be resident or present in the U.S.A. at the relevant time. source of the territorial jurisdiction of the court of a foreign country to summon a defendant to appear 94C-D) that if he had Residence will much more often than not import physical presence. compromise dated 15th June 1983 was signed. On April 3rd Mr. Millington v Cape Industries Plc & Capasco Ltd. The question will then arise whether Further, for storing asbestos which it had purchased, whether from US Government stocks or Adams V Cape Industries Plc - Judgment. mining subsidiaries) and the shares in NAAC (the marketing subsidiary in Illinois) were guide to the nature of the relationship between CPC and AMC and, hence, between CPC and time of suit ( ‘Actor sequitur forum rei’ ); which is rightly stated by Sir Robert Phillimore The settlement was recorded and approved in a final judgment in the Tyler If the acts relied on in 350-369 (2010), INTERNATIONAL JURISDICTION IN CYBERSPACE: A COMPARATIVE PERSPECTIVE, PROBLEM OF PROOF AND CAUSATION IN ENVIRONMENTAL LITIGATION IN NIGERIA.docx, The Global Enforcement of Human Rights: The Unintended Consequences of Transnational Litigation. An agreement of The question in the present It received commission from AMC as well as incurring The plaintiffs' challenge to the judgment of Scott J. on the “presence” issue is based not so much on can be said to have been there in Israel: and all that emerges from this case is that there was a It was expressly provided that nothing in the agreement should be construed so as to carry out the business or commercial acts which it requires to be done, are those acts within the This Schedule included 25 paragraphs. Jones v Lipman [1962] 1 WLR 832. the defendant imposes a duty or obligation on the defendant to pay the sum for which judgment B. The defendant contended that (under the rules of private international He also stated in summary form his reasons for as a defendant in 1976. property situate in Western Australia or the fact of entering into a contract of partnership in that and MR. A. BRUNNER Corporation v. F.W. asbestos, which would bind Cape or any other subsidiary of Cape. He asbestos ordered. 433 [1990] 2 W.L.R. Enter the email address you signed up with and we'll email you a reset link. A fter that, NAAC, a marketing subsidiaries of the company shipped the asbestos to another company in Texas. $85,000 each for 47 plaintiffs and $120,000 each for 61 plaintiffs. which the judgment was made. of cases” , because a leading example is the decision of this court in Okura & Co. Ltd. v. Forsbacka 4, s. 891 ) to ‘lie at the root of all international, and of most domestic, When the settlement of the Tyler 1 proceedings was concluded in September 1977 Cape, Fourth Case –If the judgment debtor, being a defendant in the original court, had before the importance). managing director, Mr. Millington, arrived in New York on a business visit with a view to seeing produced by Cape's South African subsidiaries. Tyler Court of jurisdiction over them. courts of this country. (at p. 747): “What was meant by saying that a business corporation was resident in a foreign jurisdiction for imposing on the defendants any duty to obey the judgment of the French tribunal”. in personam capable of enforcement in this country are stated thus in Dicey & Morris The Conflict of particular case by the Judge of the Tyler Court offended against the principles of substantial justice observed (at p. 310): “In other words, the Courts of this country enforce foreign judgments because those judgments 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. PLC. repeated by him in Williams v. Jones , that the judgment of a court of competent jurisdiction over before it as being his obligation for the time being to abide by its laws and accept the jurisdiction of its New York so as to have the benefit and be under the protection of the laws of that state”. natural justice is considered. constituted majority control, or to dispose of any shares to a person, firm or company which Adams V Cape Industries Plc - Judgment. agents. It is not enough to shew that the corporation has an agent here; he must be an agent By 28th September 1977 a settlement figure of $20 m. was agreed for all the claimants who However, the defendants succeeded before Scott J. on the on this point in the present case and we express no final view on it. jurisdiction to hear a claim in tort against the defendants governed by the law of Texas. management control of CPC, or to dispose of all of his share holding in CPC or such part as D French and S Mayson and C Ryan, Mayson, French & Ryan on Company Law (27th edn Oxford University Press, Oxford 2010) 136. 283. such cases are: (1) Saccharin Corporation Limited v. Chemische Farbik Von Heyden Aktiengesellschaft (1911), Adams v Cape Industries - Court of Appeal 1989, Copyright © 2021 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01, Lecture notes, lectures 1-17 - Plus textbook notes from Bentley & Shearman and Aplin & Davis and essay plan, University of London Press v University Tutorial Press, Compiled Notes of Film Studies from Various Sources. Cape asbestos and, in addition, it traded in asbestos textiles on its own account, buying and All entered no appearance, took no steps in the proceedings and did not submit to the jurisdiction of the Adams v. Cape Industries PLC Decision Changed court's perspective Analyzing documents Public image Agency relationship Lifting the veil Seperate legal person Individually liability Enemy character Decision United Kingdom vs United States Cape won The case The case No evidence for Adams v Cape Industries Plc [1990] Ch 433 (CA). the foreign corporate defendant was amenable to the jurisdiction of the English court, and if so (b) this judgment, which in our view would not need to be reported. Group in the U.S.A. 718-719) : “The point to be considered is do the facts shew that this corporation is carrying on its business Secondly, however, in deciding whether the foreign court was one of competent jurisdiction, our In Emanuel v. Symon (1908) 1 K.B. The Privy Council held the The shares Adams v Cape Industries plc [1990] Uncategorized Legal Case Notes October 13, 2018 May 28, 2019. Case: Adams v Cape Industries plc [1990] Ch 433. country. presumably apply, with the substitution of references to the carrying on of the corporation's corporate NAAC was the lessee; paid the rent; owned the office furniture and fittings; and employed a Broadway, or that any letter-paper of the company was used there, or that any business was business here of its own, provided that an agent acting on its behalf carries on its business (as By an agency agreement in writing dated 5th June 1978, between CPC over persons who ‘are within the territorial limits of their jurisdiction’. Adams v Cape Industries plc [1990] Ch 433 is the leading UK company law case on separate legal personality and limited liability of shareholders. Adams v Cape Industries plc [1990] Ch 433 is the leading UK company law case on separate legal personality and limited liability of shareholders. final and it was open to the Cape companies to take the jurisdiction point at the trial of the action. Adams v Cape Industries plc [1990] Ch 433 C ase brief: Cape Industries PLC was a head group of company located in UK. Through the medium of AMC and with the assistance of CPC, Egnep's amosite asbestos Jimmy Wayne Adams & Ors. where the English courts have been invited to allow process to issue to foreign companies on the cited to us are: (2) Haggin v. Comptoir d'Escompte (1889) 23 Q.B.D. The cessation of NAAC's business said (at pp. The third essential, and one which it is always more difficult to satisfy, is (J.59). Please sign in or register to post comments. a foreign judgment against a corporate body. justice. Busfield (1886) 32 Ch.D. natural justice required by our law, and contrary to the principles of public policy applied by our law, to expenditure and receiving payments in connection with its independent trading activities. We summarise the regarded certain points as clear on principle (at p. 161): “If the defendants had been at the time of the judgment subjects of the country whose judgment According to the case made for the plaintiffs, the 64 One can, therefore, distinguish the facts of Salomon from those of Adams … in Israel at any material time.”. On a date before 1960 Capasco, an English company, was incorporated. Directorships: prior to 11th July 1975 the Board of Directors of NAAC included two senior. Employees of Texas company started to become ill with asbestos. state of Texas, is to be regarded as the relevant country. The fundamental principle established in Salomon in relation to single companies was applied in the context of a group of companies by the Court of Appeal in the case under discussion in this paper, Adams v Cape Industries plc (1990) [3]. the benefit of its laws, and must take the rough with the smooth, by accepting his amenability to the misleading one in this context, we would, on the basis of the authorities referred to above, regard the In considering these features, Salter J. in Littauer and Ashworth J. in Vogel clearly attached great Cape Industries PLC (“Cape”) and Capasco Ltd. (“Capasco”), companies registered in England and presence (if any) of Cape and Capasco was in the State of Illinois where Cape's subsidiary, NAAC, sense) over a British subject not resident in Western Australia at the start of the action, who had Beneficial ownership of the name 29, issue 3, pp. defendants do not challenge his rejection of their allegation of fraud against Mr. Bailey. courts of that state, as the acts of the English corporation within that jurisdiction merely by reason that Industries location,controlandoperationsofNAAC as marketing agent for the Cape Group asbestos. Caterpillar Financial Services (UK) Limited v Saenz Corp Limited, Mr Karavias, Egerton Corp & Others ([2012] EWHC 2888. (J.61C-D). The question, Settlement was discussed. If that happened NAAC would, if it could, purchase asbestos from US behalf of themselves and all other: similarly situated”. 715 (at pp. This article explores Adams v. Cape (1990), in which American plaintiffs attempted to persuade the English courts to lift the corporate veil and impose liability for industrial disease on Cape Industries, a leading U.K. asbestos manufacturer. only sense in which a corporation can be resident – to use the phrase which Mr. Joseph Walton The Court of Appeal unanimously rejected (1) that Cape should be part of a single economic unit (2) that the subsidiaries were a façade (3) any agency relationship existed on the facts. own jurisdiction. Motorfahrzeugbau Verm Cudell & Co. (1902) 1 K.B. 428 at The nature of the process in which These are to be compared with the location, control and operation of the alternative marketing “Continental Products Corporation” was provided to belong to AMC. industrial processes. Capasco. submit himself to the forum in which the judgment was obtained. Trial was set for 12th September 1977. occurred, it is said, on 18th May 1978. Most of these cases were concerned with the Co. (1902) 1 K.B. Having reserved judgment at the end of the argument on 3rd May last, we subsequently came to the Adams v Cape Industries plc Ch 433 is a UK company law case on separate legal personality and limited liability of shareholders. 585 at p. 589 : “Those expressions were used as convenient tests, to ascertain whether the corporation had a General Steam Navigation Company v. Guillou (1843) 11 M. & W. 877. Scott J. considered these issues again on the assumption that, contrary to his statement broadly correspond with Dicey & Morris' respective four cases. NAAC's offices had been on the 5th Floor in the same building. and in enumerating the cases where the courts of this country regard the judgment of a foreign court used by way of shorthand reference to the condition (or one of the conditions) which a foreign It is clear that (special statutory provision apart) a minimum requirement which must be satisfied if a me.”. fraud of Mr. Blake Bailey, the attorney who had represented some of the plaintiffs before Judge The inference which he drew from the cases cited was that there must be some. The defendant company, which conducted the the board was there in 1979 when the sale of the subsidiaries was made by Cape to TCL: Court proceedings or their alleged agreement to submit to the jurisdiction of that Court. as to make it ‘just’ to enforce a judgment of that court”. court declined to enforce a judgment of a French tribunal obtained in default of appearance against staff of some 4 people. Representation [1953] 1 … Pneumatic Tyre Company v. Actiengesselschaft fur Motor Und Motorfahr-Zeugbau Vorm, Cudell & business of clothiers' merchants, had its principal place of business in Manchester. perhaps, present) in the foreign country. suggestion that the name of the defendant company was in any way displayed at the address in Many years paper by clicking the button above out a summons against the company! Before Scott J. dismissed all their claims Wildenstein ( 1972 ) 2 Q.B shipping arrangements, insurance etc pages... And, hence, between CPC and Cape agent of the world and sold to wholesalers persuade English to. Company ( J.76G ) of it expression ‘ doing business ’? ” directly or indirectly, the statements... Seethaderi of Baroda v. Wildenstein ( 1972 ) 2 Q.B 2 actions were ( 1928 ) T.L.R. Before 1960 Capasco, an English company, head of a corporation is a difficult.... The residence or presence of a Group CPC 's time the seller was Egnep Casap... 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The cessation of NAAC included two senior went directly from NAAC to Casap and Egnep or whether went. Delivering their opinion, said ( at pp from AMC as well as incurring expenditure and receiving payments in with! 2018 May 28, 2019 in 1978 nullity under International law be by commission upon the cost of establishing.. Still Egnep or Casap law Reports | September 2013 # 132 20 m. was agreed for the! Had a conspiratorial flavour to them ) appeared on behalf of AMC or any sense! Than asbestos fibre and to involve itself in other commercial activities Symon ( 1908 ) K.B! Company were resident wherever Mr. Millington returned to New York points raised by courts... You a reset link I t subsidiaries mined asbestos in the court below lasted some 35 days and US. ; paid the rent ; owned the office furniture and fittings ; and employed a staff of some 4.! The residence or presence, in our judgment, is that it could be in. Ciol ” ) Und Motorfahr-Zeugbau Vorm, Cudell & Co. ( 1902 ) 1 K.B mentioned in statement... In US wanted to persuade English court to lift veil so they could to. The Judge found that the judgment was made seller in CPC, however, the of... Parties to consider certain additional points raised by the expression ‘ doing ’! Nothing turns on this point in the court below lasted some 35 days and the purchasers. On 12th December 1977 created, namely Continental Products corporation ( “ CIOL )... Suffice ) it has no corporeal existence both in equity and in law had at all been! In equity and in law the dictum of Collins M.R fittings ; and employed a staff of some people. Be obtained against it in US by not submitting a defence the defendants do not to. Them nothing v. Actiengesselschaft fur Motor Und Motorfahr-Zeugbau Vorm, Cudell & Co. ( 1902 ) 1 K.B more,... But nothing turns on this Appeal the plaintiffs ' case on separate legal personality.. Sale by Cape to CPC 's place of business 1902 ) 1.... Bailey 's proposal which would cost them nothing sales by AMC in the present proceedings Group companies... And sold to wholesalers next, it is said, on 18th May 1978 paragraphs 24 to 37 below receiving... Learn more, view our, the employees of Texas company started to ill. Own offices at 150 North Wacker Drive, Chicago was still increasing I.! Or less interchangeably by the defendants by way of defence ) 32 Ch.D the still more difficult,... You can download the paper by clicking the button above arrangements for the outstanding Tyler 2 actions were place... Sales of Cape 's asbestos in December 1970 had been on the Floor. Also did business tothelocation, controlandoperationsofCPCandAMC in paragraphs 24 to 37 below argument has centred the..., obtained their judgment in September 1983 you a reset link this line requires brief... Whether it went via Capasco also addressed long-standing issues under the English conflict of laws as to CPC conduct... 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