DHN Food Distributors Ltd v Tower Hamlets London Borough Council
[1976] 1 WLR 852
Ratio Decidendi
The corporate veil may be lifted to treat a group of companies as a single economic entity where the subsidiaries are wholly owned and controlled by the parent, and justice requires it.
Facts
DHN traded from premises owned by its wholly-owned subsidiary, Bronze. The council compulsorily acquired the premises and offered compensation to Bronze (as owner) but refused business disturbance compensation to DHN (as it had no legal interest in the land).
Judgment Summary
The Court of Appeal lifted the corporate veil, treating DHN and its subsidiaries as a single economic entity. DHN was entitled to compensation for business disturbance as it effectively owned the premises through its subsidiary.
Key Quotes
"These three companies should, for present purposes, be treated as one."
— Lord Denning MR
Subsequent Treatment
Disapproved in Woolfson v Strathclyde [1978] and Adams v Cape Industries [1990]. The single economic unit theory is no longer generally accepted as grounds for piercing the veil.