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Corporate personality: utilising trust law to invoke the application of the concealment principle

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journal contribution
posted on 01.12.2016, 15:59 by Gregory Allan, Stephen Griffin
The landmark Supreme Court judgment in Prest v Petrodel Resources Ltd provides a significant re-assessment of the law relating to a court’s ability to circumvent corporate personality. The Supreme Court considered that the application of ordinary legal principles (‘the concealment principle’) should ordinarily override a court’s ability to apply an equitable veil-piercing doctrine (‘the evasion principle’). Whilst accepting the primacy of the concealment principle, this article disputes the correctness of the Supreme Court’s implied assertion that, in cases concerning ‘one man-type’ companies, the concealment principle should be advanced through application of agency-derived principles. Rather, this article contends that the concealment principle should be progressed by adopting solutions derived from the law of constructive trusts and associated principles of equity. To an objective of providing a doctrinally sound framework for the development of the law in the post-Prest era, this article further suggests that the constituent elements of the evasion principle could be consistent with the operation of a distinct species of constructive trust. Moreover, it is argued that, in future, this ‘evasion trust’ should, in complete abrogation of the equitable piercing doctrine, be developed so as to apply in all cases exhibiting intentional and fraudulent abuses of the incorporation process.

History

Citation

Legal Studies, 2018, 38(1), pp. 79-102

Author affiliation

/Organisation/COLLEGE OF SOCIAL SCIENCES, ARTS AND HUMANITIES/School of Law

Version

AM (Accepted Manuscript)

Published in

Legal Studies

Publisher

Cambridge University Press (CUP), Society of Legal Scholars

issn

0261-3875

eissn

1748-121X

Acceptance date

25/11/2016

Copyright date

2018

Available date

11/05/2018

Publisher version

https://www.cambridge.org/core/journals/legal-studies/article/corporate-personality-utilising-trust-law-to-invoke-the-application-of-the-concealment-principle/BFF43FC9C596971DFC30565C36C05577

Language

en

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