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

See all articles by Jason Harris

Jason Harris

The University of Sydney Law School

Abstract

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

Harris, Jason, 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, Available at SSRN: https://ssrn.com/abstract=870516

Jason Harris (Contact Author)

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia

HOME PAGE: http://https://sydney.edu.au/law/about/people/profiles/jason.harris.php

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