Piercing the Corporate Veil

1. Is there an existing legal obligation, liability, or restriction, which is being deliberately

evaded​, ​OR whose enforcement is being deliberately frustrated by interposing a
company under the person’s ​control​? (​Prest v Petrodel [35]​)
a. Is there an existing legal obligation, liability or restriction?
b. If so, is it being deliberately evaded or frustrated by interposing a company under
the person’s control?
c. Is the company under the person’s control? (this can be effective/indirect control
or​ formal control) (​Gildford Motor v Horne​)
d. Was the company/transaction designed in such a way as to avoid being
governed by particular legislation? If so, in the absence of a sham situation,
people are entitled to manage their affairs in a way which keeps them outside of
the scope of legislation. It is not a question of evasion (​Re Securitibank​)
2. Does the presence of the corporate veil (separate legal personality) create a substantial
injustice which the Court cannot permit? (​Chen v Butterfield​)
a. Savill v Chase Holdings TEST: It is appropriate to pierce the corporate veil only
where special circumstances exist indicating that it is a mere façade concealing
the true facts
b. If it is not necessary to pierce the corporate veil, it is not appropriate to do so,
because on that footing there is no public policy imperative which justifies that
course (​Prest v Petrodel​)