Liability within company gr oups

Stevens, Richard (2016-12)

CITATION: Stevens, R. 2016. Liability within company groups. Journal of South African Law / Tydskrif vir die Suid-Afrikaanse Reg, 2016(4):709-730.

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In Bank of Tokyo Ltd v Karoon the court held that the law does not involve itself with economics but with the law. This view was confirmed by the English appeal court in Adams v Cape Industries plc. These views were expressed within the context of company groups and the possibility of holding companies liable for the acts of a subsidiary. However, company groups are commercial realities. The law, however, in many respects does not give effect to this commercial reality but instead still has as its point of departure the doctrines of separate juristic personality and limited liability. In DHN Food Distributors Ltd v Tower Hamlets London Borough Council, Bronze Investments Ltd v Tower Hamlets London Borough Council and DHN Food Transport Ltd v Tower Hamlets London Borough Council the relevant court recognised the economic reality of the group, but this view was rejected in the Adams case.

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