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DHN Food v Tower Hamlets

251 words (1 pages) Case Summary

21st Oct 2021 Case Summary Reference this In-house law team

Jurisdiction / Tag(s): UK Law

Legal Case Summary

DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852

Piercing the corporate veil – groups of companies

The corporate veil may be pierced where groups of companies can be treated as partners.


DHN was the holding company in a group of three companies. There were two subsidiaries, wholly owned by DHN. One subsidiary owned land used by DHN, the other owned vehicles used by DHN. The land was subject to compulsory purchase, and DHN sought compensation for disturbance of its business.

Decision / Outcome

In the Court of Appeal, Lord Denning MR said:

“These subsidiaries are bound hand and foot to the parent company and must do just what the parent company says… This group is virtually the same as a partnership in which all the three companies are partners. They should not be treated separately so as to be defeated on a technical point.” (at 860)

It was therefore held that DHN was entitled to claim. The separate corporate personality doctrine was overridden. However, this is likely to only be followed where the subsidiaries are wholly owned and serve no purpose other than to own the parent company’s assets. The case has not been applied to make one company in a group liable for the debts of another – Re Southard and Co Ltd [1979] 1 WLR 118.

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Content relating to: "UK Law"

UK law covers the laws and legislation of England, Wales, Northern Ireland and Scotland. Essays, case summaries, problem questions and dissertations here are relevant to law students from the United Kingdom and Great Britain, as well as students wishing to learn more about the UK legal system from overseas.

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