Separate Corporate Personality: Piercing the Corporate Veil

Separate Corporate Personality: Piercing the Corporate Veil

Shub, Oscar

I.

INTRODUCTION

This article will outline the circumstances in which Australian courts will pierce the corporate veil. It will also discuss “shadow directors” and analyse three cases highlighting the importance of a parent ensuring that subsidiaries make independent decisions.

II.

SEPARATE CORPORATE PERSONALITY

The “separate entity” doctrine, that the company is an entity separate to its shareholders, as established in Salomon s case1 applies in Australia.

The Corporations Act 2001 (Cth) states that a company comes into existence as a body corporate on the day it is registered by the Australian securities and Investments Commission (ASIC).2 In doing so, a “company” becomes a legal entity with the legal capacity and powers of an individual.3

III.

LIMITED LIABILITY

Salomon’s case also held that a company’s property is not the property of the members, and its debts are not the debts of its members.4 As such, in combination with the principle of separate corporate identity, the principles have lent themselves to the concept of limited liability.5 Of course, it is for the company, at the time of incorporation, to determine the liability of its shareholders and this is a matter removed from its separate corporate personality status. For a variety of reasons, including shareholder security and economic efficiency,6 Australian companies will normally be limited by shares.

The shareholders of a limited liability corporation are not personally liable for debts incurred or torts committed by the company. In the event that a company falters, a shareholder’s losses are limited to the amount that the shareholder has invested in the company.7

IV.

LIFTING THE CORPORATE VEIL

A. Definition

The expression “lifting or piercing the corporate veil” refers to a court looking behind the separate legal personality of a company. In effect, the court will look behind the corporate entity to assign a corporate right, privilege, duty or liability to a member of the company where a strict application of the separate legal personality doctrine would vest the liabilities or rights solely in the company.8

B. When to Lift

The case law in Australia has demonstrated that courts are generally reluctant to lift the corporate veil.9 It is, however, difficult to predict the situations in which the courts will pierce the corporate veil, and there seems to be a tendency to “reinvent the wheel” each time the matter is argued.10

Australian courts have approached veil-piercing cases in an ad hoc manner with underlying policy considerations in mind. As Rogers A.J.A. confirmed in Briggs v. James Hardie & Co. Pty Ltd.11

The threshold problem arises from the fact that there is no common, unifying principle which underlies the occasional decision of courts to pierce the corporate veil. Although an ad hoc explanation may be offered by a court which so decides, there is no principled approach to be derived from the authorities . . . .12

When deciding to disregard the separate legal personality principle, Jenkinson J., in Dennis Wilcox Pty Ltd. v. Federal Commissioner of Taxation, ° stated that a court should do so:

only if [they] can see that there is in fact or in law a partnership between companies in a group, or that there is a mere sham or façade in which that company is playing a role, or that the creation or use of the company was designed to enable legal or fiduciary obligations to be evaded or a fraud to be perpetrated . . . .14

Jenkinson J.’s summation, while not exhaustive, does include some indicators where Australian courts have been willing to pierce the corporate veil.

C. Fraud or Sham

The corporate veil may be lifted where there has been a fraud or other breach of the law.15 The fraud and sham argument refers to the use of a corporation by the controller to evade a legal or fiduciary obligation, where the corporation is used as a front to mask real obligations.

As the full Federal Court noted in Donnelly v. Edelsten16 “[t]he argument [of fraud] is, of course circular. It can only succeed if the argument of sham succeeds . . . .”17 If a company is a “sham” or “façade” then it has incorporated merely to disguise the reality of its operations18 or evade obligations.19

In order to pierce the corporate veil for fraud, the company “must have the intention to use the corporate structure in such a way as to deny the plaintiff some pre-existing legal right.”20 More specifically, the corporation is used in a manner to avoid a legal obligation.21 It is generally permissible to form companies to avoid a future liability, for example in a risky business venture that may fail; however, courts may not allow a company to be formed to avoid performing an existing legal duty.

Nevertheless, such arguments can be criticised for disregarding the separate entity principle.22 In regards to a “sham” corporation, Windeyer J. has held “[i]f a company is duly incorporated and registered under the [Corporations] Act and the proper records are kept in due form and the prescribed returns are made, it continues to exist as a legal entity. In that sense it is a reality not a sham.”23

D. Agency24

The term “agency” indicates an authority or capacity of one person to create legal relations between a “principal” and third parties.25 A shareholder of a company (whether it be a parent company or human shareholder) may have such a degree of effective control that the company is held to be an agent of the shareholder and the acts of the company are deemed to be the acts of that shareholder.

An agency relationship can be created by the express or implied agreement (whether contractual or otherwise) of principal and agent whereby the agent consents so to act.26 Therefore, there can be no agency arrangement unless both principal and agent have consented to it either expressly or by implication from their words and conduct.27

* Agency by express agreement is created when the principal, or some person authorized by the principal, expressly appoints the agent (whether in writing or orally).

* Agency by implied agreement arises from conduct of the parties towards each other that makes it reasonable to infer consent to the relationship of agency.28

The agency principle mainly characterizes the relationship between the holding/parent company and its subsidiary. However, a wider scope has been given to the term “agency” and it can be applied to represent relationships between subsidiaries or related companies within a group. While there is no reason to suggest that agency principles should be applied differently, courts seem to be more reluctant to lift the veil between a company and an individual shareholder than they are to lift the veil between group companies.29

Meagher J.A., in Briggs v. James Hardie & Co. Pty Ltd.,30 held that a holding company and its subsidiary are prima facie separate legal entities, and without proof of an agency agreement between them, the subsidiary is not the agent of the holding company. As such, the courts have taken the approach of looking at the true nature of the agreement or the exact circumstances of the relationship between the alleged principal and agent.31

E. Group Enterprise

Any divergence from the principle of separate corporate personality is likely to be accompanied by a rescission of limited corporate liability. This is, perhaps, most evident in a corporate group structure.32

The group enterprise ground includes circumstances in which a corporate group is acting in such a manner as to make each individual entity indistinguishable and, thus, the corporate veil is lifted to treat the parent company as liable for the acts of the subsidiary. Factors that indicate that two or more companies were engaged in a group enterprise include:

* overlapping directors, officers, and employees;

* obvious influence or control extending from the top of the corporate structure;

* the extent to which the companies were thought to be participating in a common enterprise with mutual advantages;

* the relationship between the two companies is that of parent and subsidiary;

* there is an element of partnership or group accounting present;

* one company in the structure acts as agent for the controlling entity; and

* there is an element of sham or facade present, that is, the corporate structure is used to evade legal or fiduciary obligations.33

As Rogers A.J.A. asserted in Briggs v. James Hardie & Co. Pty Limited & Ors,34 “the proposition . . . that the corporate veil may be pierced where one company exercises complete domination and control over another is entirely too simplistic.”35 Rogers A.J.A. went on to recognise that it is a commercial reality that a parent company more often than not does exercise complete control over a subsidiary,36 hence revealing a possible flaw in the “simplistic” proposition.

In Australia, a shareholding of more than fifty percent is required to establish the holding company/subsidiary relationship under the Corporations Act.37 However, for the purposes of some areas of the Corporations Act, corporate groups are defined more broadly than holding company/subsidiary. This broader definition of “controlled entities” looks not just to the ability to legally control the composition of the subsidiaries’ board but also to practical influence. In these circumstances, something less than fifty percent holding would be sufficient.

It is uncertain whether a court will depart from the separate legal entity doctrine when a parent or controlling company did not sufficiently resource the corporation that is unable to meet its obligations.38

F. Subsidiary Commits a Tort

Although the courts have been more inclined to pierce the corporate veil in contract claims, there are indications that they are prepared to lift the corporate veil and make a parent company liable in relation to torts committed by a group company (even if wholly owned). The categories include:

(a) Cases of agency, partnership or trust between the subsidiary and parent company;39 and

(b) attribution of direct liability by reason of the parent company and subsidiary both owing a duty of care to the tort claimant according to the limiting tests of reasonable foreseeability and proximity, chiefly demonstrable by a level of actual control over day-to-day operations of the subsidiary,40 akin to the subsidiary being a mere façade.41

V.

CORPORATIONS ACT (CTH) 2001

A. Holding Company s Liability for Debts of Subsidiary

A holding company may be liable for debts of its subsidiary incurred while there were reasonable grounds for suspecting that the subsidiary was insolvent (or would become insolvent as a result of the transaction). The holding company or its directors must also be aware, or should have been aware, that the subsidiary was insolvent. In this case the liquidator may recover from the holding company an amount equal to the loss or damage.42 However, the provision will only be available when a debtor or claimant is unable to bring an action against the subsidiary due to the subsidiary’s insolvency.

B. Directors’ Liability for Unpaid Tax

If a company goes into liquidation and a court orders that a payment to the Australian Tax Office is voidable under section 588FE (voidable transactions) and the court orders that it is void under section 588FF (court orders regarding voidable transactions), then the directors must indemnify the Commissioner of Taxation for the tax debt under section 588FGA.43

C. Directors’ Liability for Insolvent Trading

If a company incurs a debt while it is insolvent, or incurs a debt that makes it insolvent, and the director knew or should reasonably have known that the company was insolvent, then the director commits an offence.44 The liquidator or creditor may then recover an amount equal to the loss.45

D. Personal Liability of Directors of Trustee Corporations

If a corporate trustee is unable to discharge an incurred liability and the corporate trustee is not entitled to be fully indemnified against the incurred liability out of trust assets, a director of the corporate trustee will incur a liability.46

This liability is an individual liability and also a joint liability with the corporate trustee. The director’s liability arises even if the trust does not have enough assets to indemnify the trustee. Notably, liabilities incurred outside Australia by a foreign company do not fall within this provision.47

VI.

SHADOW DIRECTORS

In addition to the imposition of liability by the Corporations Act on holding companies for their insolvent subsidiaries, holding companies with subsidiaries face the possibility of being found to be a shadow director of their subsidiaries. In particular, shadow and de facto directors raise similar issues for piercing the corporate veil because a controlling shareholder may (perhaps unwittingly) be a shadow director.

If a corporate board is accustomed to act in accordance with the instructions or wishes of another person, then that other person may be a shadow director. Parent companies or controlling shareholders are most commonly alleged to be shadow directors because of their influence over the board’s decision-making.

A. Defining a Shadow and De-Facto Director

Section 9 of the Corporations Act (Cth) 2001 defines a director to include:

* De facto director: although not validly appointed as a director any person who acts in the position of director will (unless the contrary intention appears) be a “director” of the company or body.48

* Shadow director: although not validly appointed as a director, any person with whose instructions or wishes the directors of the company or body are accustomed to act, will (unless the contrary intention appears) be a “director” of the company or body.49

* Note: Persons acting in a professional capacity or business relationship are exempted from the operation of these provisions provided they are merely giving advice to the directors.50

B. “Person ”

The definition of “person” in Section 9 has been construed so that a corporation can be a “director” for the purposes of Section 9 even though it cannot be “appointed” as such.51 This is supported by the line of cases that have found a holding company to be a director of its subsidiary.52

C. “Instructions or Wishes ”

The terms “instructions and wishes” can be distinguished from “advice” on the basis that “advice” is merely an opinion and not a directed course of action. In contrast, a party is required or compelled to follow “directions or instructions” as the term suggests no element of choice on the part of those being instructed.53

It is unclear whether a single instruction or wish will satisfy Section 9. It seems unlikely for a single act to result in the directors becoming “accustomed to act.”54 Yet, it is arguable that a single instruction or wish of fundamental importance that results in an action repeatedly being taken by the corporation may fulfill this requirement.

In addition, it is uncertain whether the instructions or wishes must be given to the board of directors as a whole or merely to a particular board member. This may be a crucial issue in determining whether the directors are accustomed to act in accordance with the instructions or wishes.

D. “Directors of the Body”

Whether all of the board members, or merely a majority of board members, must be accustomed to act in accordance with a person’s instructions or wishes is also not clear. However, since decisions made by the board are made by a majority of directors, the logical position would be to simply require a majority of directors to be accustomed to act in accordance with the person’s instructions or wishes.

E. “Accustomed to Act”

This element is intended to cover those persons with effective control of a corporation, making decisions that the directors of the corporation simply follow without independent thought, analysis or discretion.

For a director to be “accustomed” to act in accordance with a person’s instructions or wishes, it is not necessary for the director to follow every direction or instruction received. The term “accustomed” suggests that the director must generally accept the instructions of the person. In others words it is arguable that the director must customarily accept and act upon the person’s instructions or wishes without independent analysis.

F. Parent and Subsidiary

In either of the foregoing categories, the controlling shareholder may find itself subject to a liability that the Corporations Act imposes on directors. This possibility will be of particular concern to parent companies with subsidiaries in financial difficulty. Once again, in times of economic difficulty, a parent company is likely to exercise management discretion and general decision-making powers in relation to the affairs of its subsidiary. If the board of the subsidiary simply accepts these decisions without independent analysis, the holding company is likely to be a shadow director within the terms of Section 9.

VII.

CASE STUDY: SHADOW DIRECTORS

A. Standard Chartered Bank of Australia Ltd. v. Antico”

In Antico, the issue of the potential liability of a lender as a shadow director was considered by the Supreme Court of New South Wales. Although the facts of the Antico case are quite complex, it is sufficient to note that the holding company (Pioneer) owned fortytwo percent of its “subsidiary” (Giant) and had three nominee directors appointed to the board of Giant. Giant had entered into a number of financial agreements with Standard Chartered, particularly the provision of a discount and bill acceptance facility of thirty million dollars, the payment of which was extended on a number of occasions.

When Giant was wound up, Standard Chartered commenced proceedings against Pioneer under the insolvent trading provisions, claiming that Pioneer was a director of Giant and was liable for the insolvent trading of Giant. After reviewing relevant circumstances such as the financial reporting requirement imposed on Giant by Pioneer, the making of strategic decisions by Pioneer, and other financial and management control issues, Hodgson J. concluded that Pioneer was a shadow director of Giant and was liable for the debts of Giant under the insolvent trading provisions. In the words of Hodgson J., these circumstances showed a “willingness and ability [of Pioneer] to exercise control, and an actuality of control, over the management and financial affairs of Giant.”56

Clearly, these circumstances indicated that Pioneer was not merely providing advice, but was giving instructions to Giant that were being implemented by Giant without any independent consideration. The effective source of decision-making within Giant was to be found in Pioneer. For this reason, Pioneer was a shadow director of Giant.

While it is possible for a holding company to be a shadow director of its subsidiary, the way in which advice is communicated to the subsidiary will be determinative in deciding whether or not it amounts to direction or instructions. If the emphasis is on the form or content of identifiable instructions or wishes, the holding company may escape liability.

B. Deputy Commissioner of Taxation v. Austin51

In Austin, the court considered the concept of de facto directorships. Mr. Austin and his wife were the friends of another couple. The two wives ran a restaurant business. The company in question was a two dollar company incorporated to incur debts for the supply of goods and services for the restaurant and the wages of the employees.

Mr. Austin was appointed as a director of the company for three months to assist at a time when the families were experiencing personal problems. Mr. Austin then sought to resign his directorship, and his accountant prepared documents to this effect. By an oversight on the part of the company’s accountant, the ASIC form confirming his retirement was never lodged. Following his purported resignation, Mr. Austin undertook numerous negotiations with the Deputy Commissioner of Taxation (DCT) for the payment of outstanding group tax and penalties, countersigned company checks in favor of the DCT, issued stop notices to the company’s bank and negotiated with other creditors. The issue, therefore, was whether Mr. Austin was a director.

The court decided that Mr. Austin was a de facto director of the company. In such a small company it was likely that Mr. Austin was exercising top management functions. Despite his purported resignation, Mr. Austin had practical direction and effective control of the company.

It also noted that while certain authority may be sufficient to deem an individual a director in a small company, it will not necessarily be sufficient to do so in a large and diversified company. This reiterates the point that there is not an all-encompassing list of factors or a single test to be applied, rather each company and each set of facts must be analysed individually.

C. Natcomp Technology Australia Pty Ltd. v. Graiche58

Natcomp is one of the more recent cases that has considered de facto and shadow directors in a superior court in Australia.

Natcomp had supplied computer equipment to Amtech which was a small company and was operated by only two people. Amtech subsequently entered into liquidation in late 1996 and Natcomp sought to recover from the directors of Amtech the price of the computer equipment that it had delivered to Amtech.

Dr Graiche was a medical practitioner and had an association with Amtech as follows:

* Graiche accompanied the directors of Amtech and the Managing Director of Natcomp to a trade fair in Taiwan in June 1996, during which Graiche made frequent use of the term “we at Amtech.”

* During the fair, Graiche had distributed a business card carrying the logo of Amtech, which described him as the “CEO” of the company, which in the view of the court was intended to mean the Chief Executive Officer. Graiche subsequently claimed that the reason he used these cards was in order to deal with the exhibitors at the trade fair for his own purposes and obtain technical information.

* Evidence was produced by a number of third parties that they had had conversations with Graiche in which he had said that “he was the person who made the decisions at Amtech.”

* In at least one instance Graiche had paid for computer equipment ordered by Amtech and paid for it in cash. At the time Graiche had said that he had a financial interest in Amtech.

* At a meeting between the directors of Amtech, Graiche and an advertising agency, Graiche was introduced as the company’s business advisor, and he had contributed financially to the company. At a later meeting, Graiche was introduced as “the brains behind Amtech.”

* Graiche had lent $ 18,000 to Amtech for a short period.

* The trial judge held that Graiche was not a director for the purposes of the Corporations Act 2001. Natcomp appealed.59

The leading judgment in the case was delivered by Stein J. The court applied Austin and decided that indications that a person may be a “director,” despite the absence of formal appointment, require a consideration of the duties performed by that person in the context of the operations and circumstances of the particular company concerned.60

(a) “In a large and diversified company, great discretion to deal with important matters must be reposed in employees.”61 So, for example, a manager of a large supermarket would not be considered a director of the company where the supermarket is but one of many operated by the company;62

(b) A relevant issue may be the reasonable perception of the person who is claimed to have acted as a director by outsiders who dealt with the company.63 To that extent, the fact that the person holds himself or herself out as a director is relevant to a finding as to the person’s status as director or otherwise.64

It was found that Graiche’s involvement with Amtech was apparently limited to an interest in the development and marketing of possible new products and this was insufficient to bring Graiche within the definition of “director.” Accordingly the appeal was dismissed.

The result is surprising as the facts arguably indicate that Graiche wielded real authority in Amtech and had permitted third parties to perceive him in that capacity. Unfortunately, in confirming the decision of the trial judge, the court did not explain why Graiche did not come within the definition of de facto director. However, this case does two things:

(a) it reaffirms the principles espoused in Austin; and

(b) it indicates that the threshold to be considered a de facto or shadow director is high.

VIII.

RECENT TRENDS

An empirical study of Australian case law relating to the limited liability doctrine was carried out in 2001.65 The authors looked at 104 cases. Some of the findings include:

(i) there has been a substantial increase in the number of piercing cases heard by courts over time,

(ii) courts are more prepared to pierce the corporate veil of a proprietary company than a public company,

(iii) piercing declines as the number of shareholders in companies increases,

(iv) courts pierce the corporate veil less frequently when piercing is sought against a parent company than when piercing is sought against one or more individual shareholders, and

(v) courts pierce more frequently in a contract context than in a tort context.66

1 Salomon v. Salomon & Co. (1897) AC 22.

2 Corporations Act, 2001, (Cth) § 119 (Austl.).

3 Id. § 124. However, to hold that a company is attributable to an individual is legal fiction; a company has no separate existence other than in the contemplation of the law.

4 Salomon v. Salomon & Co. (1897) AC 22.

5 Although it may be submitted a “member” at the time of Salomon’s case has been altered significantly by twentieth century developments in corporations law, it is generally accepted that their Lordships’ use of “member” is equivalent to a “shareholder”; see Watson S., Who Hides Behind the Corporate Veil? Finding a Way out of the Legal Quagmire, 20 Co. & SEC. L.J. 198, 201 (2002).

6 For a detailed discussion of the benefits of limited liability see Blumberg P, Limited Liability and Corporate Groups, 11 J. CORP. L. 573, 623-26 (1986); Murphy D., Holding Company Liability For Debts of its Subsidiaries: Corporate Governance Implications, 10 BOND L. REV. 241 (1998).

7 Bainbridge M., Abolishing Veil Piercing, J. CORP. L. 479, 480 (2001).

8 HALSBURY’S LAWS OF AUSTRALIA [120-3010] Lifting the Corporate Veil.

9 Hadoplane Pty Ltd. v. Edward Rushton Pry Ltd. (1996) 1 Qd R 156, 160.

10 Noakes D., Reform to the Law of Corporate Groups in Australia to Protect Employees, 34 U. BRITISH COLUMBIA L. REV. 239, 259 (2000).

11 (1989) 16 NSWLR 549.

12 Id. at 567.

13 79 A.L.R. 267.

14 Id. at 272.

15 Baxt R. & Lane T., Developments in Relation to Corporate Groups and the Responsibilities of Directors – Some Insights and New Directions, 16 Co. & SEC. L.J. 628, 646 (1998).

16 (1994) 49 F.C.R. 384.

17 Id. at 394.

18 Sharrment Pty Ltd. v. Official Tr. in Bankr., (1988) 19 F.C.R. 449, 456.

19 Farrar J., Legal Issues Involving Corporate Groups, 16 Co. & SEC. L.J. 184, 185 (1998).

20 Payne J., Lifting the Corporate Veil: A Reassessment of the Fraud Exception, 56 CAMBRIDGE L.J. 284, 290 (1997).

21 See Gilford Motor Co. Ltd. v. Home (1933) Ch. 935; Jones v. Lipman (1962) 1 All ER 442.

22 Watson S., Who Hides Behind the Corporate Veil? Finding a Way out of “The Legal Quagmire,” 20 Co. & SEC. L.J. 198, 210 (2002).

23 Peate v. Fed. Comm’r of Taxation (1964) 111 C.L.R. 443, 480.

24 For a detailed discussion of lifting the veil and agency in Australia see Harris J., Lifting the Corporate Veil on the Basis of an Implied Agency: A Re-evaluation of Smith, Stone and Knight, 23 Co. & SEC. L.J. 7 (2005).

25 Int’l Harvester Co. of Austl. Pry Ltd. v. Carrigan’s Hazeldene Pastoral Co. (1958) 100 C.L.R. 644, 652.

26 HALSBURY’S LAWS OF AUSTRALIA [15-35] Method of formation.

27 Id. [120-3010] Lifting the corporate veil. See, e.g., Garnac Grain Co. v. HMF Faure & Fairclogh Ltd. [1968] AC 1130, 1137.

28 Hook v. Day (1971) 2 SASR 440.

29 Ramsay, I. & Stapledon, G., CORPORATE GROUPS IN AUSTRALIA, Centre for Corporate Law and Securities Regulation 20 (1998); Varangian Pty Ltd. v. OFM Capital Ltd. (2003) VSC 444, [143] (Dodds-Streeton J.).

30 (1989) 16 NSWLR 549, 556.

31 Norwich Fire Ins. Soc. Ltd. v. Brennans (Horsham) Pty Ltd. (1981) VR 981.

32 Haddy S., A Comparative Analysis of Directors ‘Duties in a Range of Corporate Group Structures, 20 Co. & SEC. LJ. 138, 145 (2002).

33 Ramsay, I., Piercing the Corporate Veil in Australia, 19 Co. & SEC L.J. 250, 257 (2001).

34 16 NSWLR 549.

35 Id. at 577; see also Heytesbury Holdings Pty Ltd. v. City of Subiaco (1998) 19 WAR 440, 451.

36 Briggs at 577.

37 Division 6 of Part 1.2.

38 For a summary of the U.S. law based on piercing the corporate veil because of undercapitalisation see Phillip Blumberg, THE LAW OF CORPORATE GROUPS: TORT, CONTRACT, AND OTHER COMMON LAW PROBLEMS IN THE SUBSTANTIVE LAW OF PARENT AND SUBSIDIARY CORPORATIONS (1987 & Supp. 2003).

39 Briggs at 549; Spreag v. Paeson Pty Ltd. (1990) 94 A.L.R. 674.

40 CSR Ltd. v. Wren (1998) Austl. Tort Rep. 81 -461.

41 See James Hardie & Co. Ltd. v. Hall (1998) 43 NSWLR 554, 579-84.

42 See Corporations Act § 588V.

43 Id. §§ 588FE – 588 FGA.

44 Id. § 588G.

45 Id. § 588M (compensation available for losses incurred as a result of insolvent trading). See further id. § 588G.

46 See id. § 197.

47 See id.; Hanel & Another v. O’Neil (2003) 180 F.L.R. 360.

48 Corporations Act § 9(b)(i).

49 Id. § 9(b)(ii).

50 Id. § 9(b).

51 Id. § 9.

52 Standard Chartered Bank of Aust. Ltd. v. Antico (1995) 131 A.L.R. 1.

53 Corporations Act § 9(b)(iii).

54 Id. § 9(b)(ii).

55 131 A.L.R. 1.

56 Id. at 70.

57 (1998) 28 A.C.S.R. 565 (Madgwick J.).

58 2001 N.S.W.C.A. 120 (“Natcomp Case”) (Spigelman C.J., Stein and Heydon J.J.).

59 Natcomp at 1-13.

60 Natcomp at 13; Austin at 569.

61 Natcomp at 13; Austin at 569.

62 Id.

63 Natcomp at 13; Austin at 570.

64 Natcomp at 13.

65 Ramsay, supra note 33, at 250.

66 Id. at 267.

Since 1970 Oscar Shub has litigated insurance and reinsurance claims and handled complex insurance and reinsurance matters involving millions of dollars in general insurance and reinsurance, professional indemnity, directors’ and officers’ liability, engineering, construction, plant and machinery, health and product liability. He has handled both facultative and treaty reinsurance matters extensively. A recent Euromoney Legal Media Group research study placed Mr. Shub in the top six insurance and reinsurance lawyers worldwide based on individual nominations. He is a leader in Alternative Dispute Resolution and was an inaugural member of the NADRAC Council advising the Federal Attorney General on alternatives to litigation.

Copyright Federation of Defense & Corporate Counsel, Inc. Winter 2006

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