Cuttings: Salomon v Salomon is Antiquated Salomon v Salomon is Antiquated | Cuttings
Things of interest.


 
October 24, 2015

Salomon v Salomon is Antiquated


Our courts shouldn't apply Salomon v Salomon so strictly.

I think I’ve more injustice done where the courts hold on too dearly to the authorities made in Salomon’s wake. All the more so with companies whose sole shareholders are also its sole directors.

Some reasons:

  1. That case is antiquated. It’s 119 years old. It doesn’t account for the sophisticated and wrongful acts knowingly perpetrated by directors/shareholders in modern times.

  2. It’s unsuited to Malaysia. I know people who avoid doing business with Malaysians whenever they can. Business here is too relationship-based (which is the same anywhere, but law enforcement here is particularly weak), and contracting parties don’t always honour their contracts (much less gentlemen’s agreements).

  3. Legal fiction is not reality. Businesspeople do cheat sometimes. And a defence based on the separate legal personality of companies is a defence based on a fundamental legal fiction, which when applied carelessly, enables cheating.



 

 
© 1997 - 2018 / Info