Nothing to See Here? The Extension of Parent Company Liability in James Hardie Industries Plc v White
42 Pages Posted: 20 May 2020
Date Written: May 20, 2020
In James Hardie Industries plc v White the New Zealand Court of Appeal looked to determine circumstances where a parent company could be directly liable for defective products produced by its subsidiary while upholding the principles behind separate corporate personality. The Court passed off the case as an unexceptional development in the law, based on an application of ordinary tort principles and supported by decisions from overseas jurisdictions. However, the Court neglected to consider the underlying policies of the cases it cited, ignored important distinctions between them and the present case and did not inquire into whether they were in fact relevantly applicable so that it in fact extended parent company liability for the acts and omissions of its subsidiary far beyond what overseas jurisdictions have held. In doing so, the Court implicitly lifted the corporate veil and failed to acknowledge the impact such a finding of liability would have on the corporate form.
Keywords: "Parent company liability","tort", "duty of care", "separate corporate personality" "economic loss" "corporate veil"
JEL Classification: K00, K13
Suggested Citation: Suggested Citation