The question on, lifting the corporate veil

In recent times, veil-piercing has been frequently pleaded in cases where claimants have sought to create liability in a parent company or other shareholders. Under this doctrine, a court ostensibly has the power to disregard the separate legal personality of the company and create liability in wrongdoing shareholders. Given that Corporations Act 2001 (Cth) s 516 creates limited liability for the shareholders in a company, a question arises as to the basis upon which courts have created an exception to this provision that appears contrary to its intention. The truth appears to be that veil piercing doctrine involves a surprising disregard of the statute.[1] Unless empowered to do so by legislation, it is arguable that judges cannot ignore the separate legal personality of the company created by registration under the Corporations Act 2001


[1] See Dimbleby & Sons Ltd v National Union of Journalists [1984] 1 WLR 427, 435, where Lord Diplock stated that ‘one would expect that any parliamentary intention to pierce the corporate veil would be expressed in clear and unequivocal language’. With respect, this must be correct.