Lifting the Corporate Veil on the Basis of an Implied Agency: A Re-Evaluation of Smith, Stone and Knight
Company and Securities Law Journal, Vol. 23, 2005
27 Pages Posted: 16 Dec 2005
This article examines the scope of the principle in Smith, Stone and Knight that the corporate veil may be lifted on the basis of an implied agency between group companies. It argues that, on a proper assessment of the weight of judicial authority in Australia, the six criteria used in Smith, Stone and Knight to determine the existence of an implied agency should not be similarly applied outside of fact scenarios identical to Smith, Stone and Knight. In contrast, it is argued that a more principled use of Smith, Stone and Knight is to use the six criteria to justify lifting the corporate veil on the basis of avoiding a legal obligation or the existence of a sham. To demonstrate the difficulties associated with applying the six criteria in Smith, Stone and Knight as a general test for identifying an implied agency relationship this article will discuss recent developments in industrial law where Smith, Stone and Knight has been used to lift the corporate veil between related corporate employers.
Keywords: Lifting the corporate veil, corporate groups, corporate agency
JEL Classification: K22
Suggested Citation: Suggested Citation