Posted: April 3rd, 2015

Corporate Law QuestiOns

Corporate Law Questions
Question 1
Red Mine Pty Ltd (Red) is a wholly owned subsidiary of GM Limited (GML). Red has few, if any, assets of its own. In 2010, an employer of Red went on to the land adjoining its mine site and left the gate open. A valuable experimental flock of Dorper Sheep escaped from the adjacent land and were lost.
In what circumstances might a court be willing to “pierce the corporate veil” and make a parent company liable for damages caused by a subsidiary?

Question 2

Nick Galli has a real passion for organic wine and would like Family Organic Wine Pty Ltd (FOW) to adopt a constitution that includes a provision guaranteeing his position as head winemaker at FOW.

Having regard to s.140 of the Corporations Act and the relevant case law, would Nick be able to enforce such a provision against FOW.