[2021] CCJ 10 (AJ) BB

IN THE CARIBBEAN COURT OF JUSTICE

Appellate Jurisdiction

ON APPEAL FROM THE COURT OF APPEAL OF BARBADOS

CCJ Appeal No. BBCR2020/004

BB Criminal Appeal No. 3 of 2018

BETWEEN

GRENVILLE RICARDO DELPEACHE APPELLANT

AND

COMMISSIONER OF POLICE RESPONDENT

Before the Honourable: Mr Justice J Wit, JCCJ

Mr Justice W Anderson, JCCJ

Mme Justice M Rajnauth Lee, JCCJ

Mr Justice D Barrow, JCCJ

Mr Justice A Burgess, JCCJ

Appearances

Mr Andrew Pilgrim QC and Ms Rashida R Edwards for the Appellant

Ms Olivia M Davis and Ms Krystal C Delaney for the Respondent

Criminal law – Intellectual Property - Trade mark – Unauthorised trade mark - Trade

Marks Act Cap 319, s 50A(1)(a)(b)(c).

Lifting corporate veil – Corporate personality – Appellant director of company –

Appellant personally committed criminal acts – Whether appellant or company to be

charged – Whether direction of the Director of Public Prosecutions needed to charge

appellant – Whether court required to pierce companies' corporate veil – Interpretation

Act Cap 1 – ss 22(2)(3) – Trade Marks Act Cap 319, s 50E(1).

The appellant was the sole director of Ouch Boutique Ltd (“the company”) in whose

store counterfeit items were sold. The appellant operated the store and was on the

premises when the counterfeit items were seized by the police. The appellant was

charged with three offences under s 50A(1)(a)(b) and (c) of the Trade Marks Act (“the

Act”). At the trial in the Magistrates Court, the appellant was found guilty and appealed

to the Court of Appeal which dismissed his appeal and affirmed his conviction and

sentence.

The appellant appealed to the CCJ and argued firstly that the Court of Appeal’s decision

was wrong as the charges which were brought against him personally should have been

brought against the company. The appellant argued that while, in certain cases, the

courts have “pierced” the corporate veil and looked behind it to see who controls the

company and, in certain circumstances, held those persons liable and not the company,

this was not a proper case to have done so. The core of the appellant’s case was that the

separate legal personality of the company protected him, the individual, from personal

criminal liability. The appellant did not appeal the Court of Appeal’s finding that he

personally performed the physical actions and possessed, at the time, the mental state

required to establish the offences. The appellant argued secondly that as he was a

director, he should have been charged for being complicit in a crime that was allegedly

committed by the company under s 22(2) of the Interpretation Act, and that the

Commissioner of Police should have obtained the direction of the Director of Public

Prosecutions before charging him pursuant to s 22(3) of the Interpretation Act. The

respondent argued that the Court of Appeal’s decision was correct and that s 50E(1) of

the Act provides that an individual may be charged for offences under s 50A(1)(a)(b)

and (c). The respondent further argued that s 50E(1) and s 22(2) and (3) of the

Interpretation Act were inapplicable as the appellant was guilty of having personally

contravened the Act regardless of whether he was liable in his capacity as a director.

The Court, in a judgment authored by Barrow JCCJ, was of the view that in respect of

the first issue the appellant was purporting to insert into the criminal law a construct

that is quintessentially a company law conception. That company law conception was

the legal separation of individuals from the company they formed. The purpose of the

legal separation was to insulate or separate the individuals from what they did, acting

through the company. The essence of that construct was that what was done was the

action of the company and not the individuals. The company law conception of separate

legal personality never operated to permit an individual who did a criminal act to say

that their actions were done in the name of the company and, therefore, it was the

company which must be prosecuted, and not the individual. There is no support either

in principle or in authority for the appellant’s thesis that there is a corporate veil in

criminal law. Where an individual, acting for and through a company, personally

performs criminal acts in conducting the company’s business, that individual may be

prosecuted. The individual gains no protection from the existence of the separate legal

personality of the company. There is no principle that a criminal offence, committed in

the name of a company, is the action of the company and not of the individual who

performed the criminal actions.

Turning to the second issue, the Court was of the view that there was no substance to

the ground that the appellant should have been charged for being complicit in a crime

that was allegedly committed by the company and that the Commissioner of Police

should have obtained the direction of the Director of Public Prosecutions before

charging him pursuant to s 22(3) of the Interpretation Act. That the appellant could have

been so charged, (under s 22(2) of the Interpretation Act), absolutely does not give rise

to the proposition that he should have been so charged.

In a concurring judgment Wit and Rajnauth-Lee JJCCJ were of the view that the judicial

“piercing of the corporate veil” doctrine has no place in criminal law proper, in any

event where statute law has been adopted to remove any uncertainty or fill any gaps by

providing specifically for criminal responsibility of certain corporate officers who

might be successful in hiding behind the corporate façade without such a statutory basis.

If criminal liability of the individual person can be attributed to the company, both the

individual person and the company may be liable. Both can be prosecuted but the

prosecutor may also choose to prosecute one of them. In this case the individual person,

who, according to the Magistrate and the Court of Appeal, personally committed the

actus reus, was prosecuted. The prosecutor simply decided that it was not necessary to

go further than that. There was nothing wrong with that decision.

Wit and Rajnauth-Lee JJCCJ also agreed with Barrow JCCJ that s 22(2) of the

Interpretation Act did not apply in this case. First, s 22(2) renders a corporate officer of

a certain category who had not personally committed an offence committed by that body

corporate nevertheless liable to prosecution as if he had personally committed that

offence. In this case, the appellant was prosecuted for offences he personally did commit

and of which he was personally found guilty. This alone excluded the application of s

22(2). Second, if the reasoning of the appellant were followed properly, s 50E of the

Act and not s 22(2) should be applied. The former provision identifies practically the

same corporate officers under similar circumstances as mentioned in s 22(2) as

personally guilty of the offence committed by the body corporate. Where s 50E squarely

provides that such an officer is guilty of the offence, no “as if” situation as contemplated

by s 22 occurs. Third, ss 22(2) and 50E do not cover the same ground at least not in the same

way, but even if they were to conclude that they did, the legal maxim generalia specialibus

non derogant, or better even, its converse generalibus specialia derogant would seem to

apply. The special later law overrides the older general law. That would be the case here.

The appeal was therefore dismissed.

Burgess JCCJ in a dissenting judgment, was of the view that the Court of Appeal was

incorrect in holding that the appellant was properly charged and convicted of

committing the charged offences in his personal capacity on the basis that he acted as

an agent of the company. The company after incorporation was in law a separate legal

person from the appellant, its incorporator and sole director. The company had “the

capacity, rights, powers and privileges of an individual”. Consequently, the company

was fully capable of operating a business; of ownership of goods; of “exposing for sale”

such goods; of having “in its possession, custody or control in the course of business”

such goods; and of “selling” such goods. The company in law criminally committed the

offences. As a general principle, a director or other similar corporate officer may be

held liable for a statutory offence where their company may also be held to have

committed that offence. However, this general principle must be read subject to s 50E(1)

of the Act and s 22 of the Interpretation Act.

Burgess JCCJ was of the view that s 50E(1) of the Act which allows for the prosecution

of directors where an offence is committed with the consent or connivance of the

director, is triggered where a company has committed an offence under the Act. Section

50E(1) applies as long as there is evidence that the company committed the offence.

Under s 50E(1), the company is liable for the commission of the offence as a principal

and the director or other corporate officer is liable to be proceeded against and punished

as an accessory or secondary party. In this way, s 50E(1) modifies the general principle

of the culpability of corporate officers for trademark offences committed by a company.

Section 50E(1) must therefore be seen as reforming the general principle and not as

merely repeating that principle.

Section 50E(1) is a veil piercing provision and must be strictly adhered to. According

to the subsection, the consent or connivance or neglect of the director or other corporate

officer in the offence committed by the company must be alleged and proved. In this

case, these things were neither alleged nor proved. Consequently, the appellant should

not have been prosecuted as a principal offender and held guilty of the offences charged

and therefore should not have been punished for them.

In analysing s 22(2) of the Interpretation Act, Burgess JCCJ was of the view that it was

undeniably a veil piercing provision as it allows (i) for the prosecution of the specified

corporate officer as a principal for an offence committed by a company and (ii) for

his/her conviction for the commission of such an offence as a principal provided

consent, connivance or neglect is proved during such prosecution. Section 22(2) opens

the veil of incorporation much wider than s 50E(1). However, respect for the Salomon

principle is maintained in the Interpretation Act by the proviso to s 22(2) in s 22(3)

which stipulates to the effect that a specified corporate officer “shall not be charged

under subsection (2) except upon the direction of the Director of Public Prosecutions”.

The s 22(3) proviso is of signal importance in the jurisprudence of separate legal

personality and corporate criminal liability. By stipulating that a corporate officer “shall

not be charged” for statutory offences committed by a company except upon the

direction of the Director of Public Prosecutions, Parliament has evinced an

unmistakable intention that corporate officers are not to be lightly charged for offences

committed by their companies. Section 22(2) permits the corporate veil to be lifted and

certain corporate officers to be prosecuted for offences committed by their companies

but, by s 22(3), such prosecution can only be pursued on the direction of the Director

of Public Prosecutions. Section 22(2) and (3) of the Interpretation Act, the general

provision, was enacted long before s 50E(1) of Cap 319, the specific provision.

Accordingly, the maxim generalia specialibus non derogant does not assist the

respondent’s argument that the general rule in s 22(2) and (3) of the Interpretation Act

has no application in this case.

There was no evidence in this case that the Director of Public Prosecutions gave any

directions that the appellant be charged. The absence of such evidence rendered the

prosecution of the appellant before the magistrate a nullity. The appellant was not

properly charged and therefore prosecuted and convicted for the charged offences. For

these reasons Justice Burgess, in whose opinion Justice Anderson joined, would have

allowed the appeal.

Cases referred to

Adams v Cape Industries plc [1990] Ch 433; ANSA McAL (Barbados) Ltd v Banks

Holding Ltd and SLU Beverages Ltd (Barbados CA, 11 December 2015); Bay Trust

Corporate Services Ltd v Longsworth [2020] CCJ 8 (AJ) BZ; Canadian Dredge and

Dock Co Ltd v The Queen [1985] 1 SCR 662; Delpeache v Commissioner of Police

(Barbados CA, 18 September 2020); Effort Shipping Co Ltd v Linden Management SA,

The Giannis NK [1998] 1 All ER 495; JH Rayner (Mincing Lane) Ltd v Department of

Trade and Industry [1990] 2 AC 22; Jones v Lipman [1962] 1 WLR 832; Macaura v

Northern Assurance Co [1925] AC 619; Moore v Bresler Ltd [1944] 2 All ER 515;

Persad v Singh [2017] UKPC 32 (TT); Prest v Petrodel Resources Ltd [2013] UKSC

34, (2013) 3 WLR 1; R v Angel [1968] 2 All ER 607; R v Boyle Transport (Northern

Ireland) Ltd [2016] 4 WLR 63; R v Fell (1981) 64 CCC (2d) 456; R v Johnstone [2003]

UKHL 28, [2003] 1 WLR 1736; R v Pearce (1981) 72 Cr App R 295; R v Powell and

Westwood [2016] EWCA Crim 1043; R v Seager & Blatch [2010] 1 Cr App R (S) 60;

R v Shamrock Chemicals Ltd (1989) 4 CELR (NS) 215; R v Zaman [2002] EWCA

Crim 1862; Salomon v Salomon & Co Ltd [1897] AC 22; Seward v The Vera Cruz

(Owners) (1884) 10 App Cas 59; Short v Treasury Commissioners [1948] AC 534;

Tesco Stores Ltd v Brent Borough Council [1993] 2 All ER 178; Tesco Supermarkets

Ltd v Nattrass [1972] AC 153.

Legislation referred to

Barbados - Interpretation Act, Rev Ed 1971, Cap 1, Companies Act, Rev Ed 1971, Cap

308, Trade Marks Act, Rev Ed 1971, Cap 319; United Kingdom - Trade Marks Act

1994, Video Recordings Act 1984.

Other Sources referred to

Allen M, Textbook on Criminal Law (8th edn, OUP 2005); Bailey D and Norbury L,

Bennion, Bailey and Norbury on Statutory Interpretation (8th edn, Lexis Nexis 2020);

Burgess A, Commonwealth Caribbean Company Law (Routledge 2013); Gillies P, The

Law of Criminal Complicity (Law Book Co 1980); Halsbury Laws of England (5th edn,

2018) vol 96; Ormerod D C and Perry D, Blackstone Criminal Practice 2021 (31st edn,

OUP 2020); Smith J C, Ormerod D C and Laird K, Smith, Hogan and Ormerod’s

Criminal Law (15th edn, OUP 2018); Williams G, Textbook of Criminal Law (Stevens

1978).

JUDGMENT

of

The Honourable Justices Wit, Rajnauth-Lee and Barrow

Delivered by

The Honourable Mr Justice Barrow

and

CONCURRING JUDGMENT

of

The Honourable Justices Wit and Rajnauth-Lee

and

DISSENTING JUDGMENT

of

The Honourable Justices Anderson and Burgess

Delivered by

The Honourable Mr Justice Burgess

on the 30th day of July 2021

JUDGMENT OF THE HONOURABLE MR JUSTICE BARROW:

[1] This appeal by Mr Grenville Ricardo Delpeache against his conviction for

offences under the Trade Marks Act1 (the Act) is brought on two grounds of pure

law, involving the separate legal personality of the company in whose store

counterfeit items were sold. In short, the appellant contends that the charges

should have been brought against the company, Ouch Boutique Limited, which is

a separate legal entity from him. He argues that to have charged him personally

was not right nor necessary and undermines fundamental company law.

1 Cap 319, Laws of Barbados.

The Facts

[2] There is no dispute as to the facts and they are easily summarised. On 13 May

2017 a customer purchased what she thought was a pair of ‘Puma’ brand slippers

from Ouch Boutique. The customer later suspected the slippers were fake and

made a police report.2 A warrant was executed at Ouch Boutique and the police

seized seventeen pairs of slippers, seven single shoes and thirty-one haversacks

which they believed to be fake Puma products.3 On 24 November 2017

Delpeache, who was the sole director of the company and operated the store, was

charged with three offences under ss 50A(1)(a)(b) and (c) of the Act. At the trial

in the Magistrates Court, Delpeache relied on defences that the company, Ouch

Boutique ought to have been charged instead of him and that he acted with a

reasonable belief that the products were genuine.4 On 20 February 2018,

Delpeache was found guilty of the three offences and sentenced to fines in the

sum of $15,000.00.5

[3] The three offences charged were two counts under s 50A(1)(b) and one count

under s 50A(1)(c) of the Act. In material parts s 50A(1) provides:

A person commits an offence who, with a view to gain for himself or

another, or with intent to cause loss to another, and without the consent of

the registered owner of a trade mark,

(a) applies to goods or their packaging a sign identical to, or likely to be

mistaken for, a registered trade mark;

(b) sells or lets for hire, offers or exposes for sale or hire, or distributes

goods which bear, or the packaging of which bears a sign referred to

in paragraph (a); or

(c) has in his possession, custody or control in the course of a business

any goods referred to in paragraph (a) with a view to the doing of

anything by himself or another, which would be an offence under

paragraph (b).

2 Delpeache v Commissioner of Police (Barbados CA, 18 September 2020) [2]-[4]. 3 ibid [7]. 4 Delpeache (n 2) [20]. 5 ibid [1] and [20].

[4] In upholding the convictions in the Court of Appeal, Belle JA delivering the

judgment observed that Delpeache “actually committed the actus reus and had

the mens rea of the offences charged”6 and “there was no need to pierce the

corporate veil7 in a case such as the appellant’s”.8 Belle JA found that Delpeache

was convicted because he “was acting as an agent of the company when he

purchased the goods, delivered them to Ouch Boutique, displayed them in the

store for sale and actually sold a pair of the counterfeit shoes”, which was

sufficient in the view of the Court of Appeal to justify his prosecution.9 These

observations were consistent with the admissions made by Delpeache before the

magistrate, as identified in the court’s judgment.10

The Foundation of the Appeal

[5] The entire foundation of the appellant’s case is the distinction the law draws

between a company and the persons who ‘own’ the company. This principle was

enshrined into company law by the English House of Lords in Salomon v Salomon

& Co Ltd11 and, as counsel submitted, is the bedrock of company law. This

separation of the legal personalities of the company and the persons who are its

shareholders is referred to as the “veil of incorporation”. The principle received

recent homage from the United Kingdom Supreme Court in Prest v Petrodel

Resources Ltd12, when Lord Sumption stated:

“Subject to very limited exceptions, most of which are statutory, a company

is a legal entity distinct from its shareholders. It has rights and liabilities of

its own which are distinct from those of its shareholders. Its property is its

own, and not that of its shareholders. In Salomon v A Salomon and Co Ltd

[1897] AC 22, the House of Lords held that these principles applied as much

to a company that was wholly owned and controlled by one man as to any

other company. In Macaura v Northern Assurance Co Ltd [1925] AC 619,

the House of Lords held that the sole owner and controller of a company

did not even have an insurable interest in property of the company, although

economically he was liable to suffer by its destruction. Lord Buckmaster

said, at pp 626–627:

6 ibid [100] - [101]. 7 For the meaning of this expression, see [5]. 8 Delpeache (n 2) [103]. 9 Delpeache (n 2) [103]. 10 ibid [7]. 11 [1897] AC 22. 12 [2013] UKSC 34, (2013) 3 WLR 1.

“no shareholder has any right to any item of property owned by the

company, for he has no legal or equitable interest therein. He is

entitled to a share in the profits while the company continues to carry

on business and a share in the distribution of the surplus assets when

the company is wound up.”

…

The separate personality and property of a company is sometimes described

as a fiction, and in a sense it is. But the fiction is the whole foundation of

English company and insolvency law.

[6] Section 17(1) of the Companies Act13 puts on legislative footing the Salomon v

Salomon principle that “A company has the capacity, and, subject to this Act, the

rights, powers and privileges of an individual.” The argument for the appellant is

that while, in certain cases, the courts have “pierced” or “lifted” the corporate veil

and looked behind it to see who controls the company and, in certain

circumstances, held those persons liable and not the company, this was not a

proper case to have done so.

The Individual and not the Company

[7] The Court of Appeal gave full reasons why it was permissible to prosecute the

appellant and not the company instead. Belle JA was clear that there had been no

need in this case to lift the corporate veil. He stated:

[100] … The answer is that Delpeache was acting as an agent of the

Company and committing the charged offences himself. There was

therefore no need under the statutory provisions of Cap. 319 to find

evidence of benefit, either by Delpeache or Ouch Boutique. There was

no need to determine whether the property belonged to Ouch

Boutique. The prosecution followed the evidence, some of which was

given by the appellant himself, to the effect that he travelled to New

York to obtain the offending goods, to place in his store. He mounted

the goods for sale and was responsible for the sale of the goods in the

store Ouch Boutique.

[101] It is not because he is a director of a one-man company that this

matters. Rather it is because he actually committed the actus reus and

the mens rea of the offences charged. There was therefore no need for

the prosecution to prove concealment, evasion, shelter or the

existence of a cloak or sham and lift the corporate veil.

13 Cap 308, Laws of Barbados.

[102] … it is very easy to presume that the acts of a company and the

property of a company, are automatically the acts and property of a

director or principal officer or the controlling mind of the company.

[103] In our view though, jurisprudence emerging from the authorities on

“piercing the corporate veil” establishes that there is no need to pierce

the corporate veil in a case such as the appellant’s. Even though we

do not agree with counsel for the Crown that the appellant should have

been prosecuted because the company Ouch Boutique was a small

company and the appellant was the directing mind, we do hold that

the appellant was clearly acting as an agent of the company when he

purchased the good, delivered them to Ouch Boutique, displayed

them in the store for sale, and actually sold a pair of the counterfeit

shoes. This was sufficient in our view to justify his prosecution.

When to Pierce the Corporate Veil

[8] The statement by Belle JA, in [101] quoted above, that there was no need for the

prosecution to prove concealment, evasion, shelter or the existence of a cloak or

sham and lift the corporate veil, was his response to the submission of counsel for

the appellant as to the limited circumstances in which a court should expose an

individual to liability, rather than a company. The appellant renews before this

Court his contention that it is only in a case of concealment or evasion, which was

not the situation in this case, that a court should allow a claim or prosecution

against an individual. The relevant ground of appeal is that ‘The Justices of

Appeal erred when they found that the Appellant was acting as an agent for Ouch

Boutique and there was no need to pierce the corporate veil in order to charge the

Appellant.’

[9] The concealment and evasion principles were discussed by Lord Sumption in

Prest v Petrodel Resources Ltd14 beginning with the observation:

[16] I should first of all draw attention to the limited sense in which this

issue arises at all. “Piercing the corporate veil” is an expression rather

indiscriminately used to describe a number of different things.

Properly speaking, it means disregarding the separate personality of

the company. There is a range of situations in which the law attributes

the acts or property of a company to those who control it, without

disregarding its separate legal personality. The controller may be

personally liable, generally in addition to the company, for something

that he has done as its agent or as a joint actor….

14 See (n 12).

[10] Counsel relied on the judgment of Lord Sumption15 to summarise the two

principles under which, alone, as he submitted, the corporate veil could be

pierced. He identified the evasion principle, which was applicable to the situation

when an individual is under an existing obligation that they seek to avoid by

interposing a company under their control to shield them from a claim or

enforcement of a claim, which pre-dated the involvement of the company.

Counsel cited Jones v Lipman16 as demonstrating the situation in which an

individual, seeking to avoid an order for specific performance, sold the property

at stake to a company he had bought, intending to put it beyond the reach of the

claimant. Where there was such an attempt at evasion, the corporate veil could be

pierced, and the remedy could be ordered against the individual as well as the

company. This, counsel submitted, was not the situation in Mr Delpeache’s case.

[11] Counsel identified as the second of the two principles, the concealment principle

which referred to the situation where corporate personality is simply being used

to hide the true position. In certain circumstances, involving impropriety and

dishonesty and not simply because it may be thought just, a court may look at the

true relationship between a company and an individual and decide on the

substance and not just the form of the relationship. In a case ‘where an offender

does acts in the name of a company which (with the necessary mens rea)

constitute a criminal offence which leads to the offender’s conviction, then “the

veil of incorporation is not so much pierced as rudely torn away” …’, as was

stated in R v Seager & Blatch.17 Against this legal back drop, counsel submitted

there was no evidence the appellant used Ouch Boutique to evade a pre-existing

liability or to conceal the true facts using the company as his agent or nominee. It

followed, counsel submitted, that since Delpeache was not concealing what he

was doing, by doing it in the name of the company, there was no legal basis for

disregarding the separate, corporate personality of Ouch Boutique and piercing

the corporate veil.

No Need to Pierce

[12] The core of the appellant’s case is his insistence that the separate legal personality

15 ibid [28]. 16 [1962] 1 WLR 832. 17 [2010] 1 Cr App R (S) 60.

of the company protected him, the individual, from personal criminal liability.

His case was that it was only if the court pierced the veil of incorporation that he,

the individual, as distinct from the company, could be liable. In my view, that

thesis rests on an existential misconception that is the singular creation of the

appellant.

[13] The appellant purports to insert into the criminal law a construct that is

quintessentially a company law conception. That company law conception was

the legal separation of individuals from the company they formed. The purpose

of the legal separation was to insulate or separate the individuals from what they

did, acting through the company. The essence of that construct was that what was

done was the action of the company and not the individuals. In the words of Lord

Sumption in Prest18 this was a fiction, that became established by law. But the

fiction was never intended, and it never operated, to permit an individual who did

a criminal act to say that their actions were done in the name of the company and,

therefore, it is the company with its separate legal personality which must be

prosecuted, and not me.

[14] A review of the cases cited by the appellant reveals there is no support either in

principle or in authority for the appellant’s thesis that there is a corporate veil in

criminal law. All the cases on which the appellant relied concerned attempts to

get at assets held by a relevant company by piercing the corporate veil and treating

its assets as those of the individual, and not accepting that they were the separate

assets of the company. The obverse holds true: in none of the cases that counsel

cited was there an issue that it was the company, and not the individual, that was

liable to prosecution for criminal conduct. In no case was there an issue of needing

to pierce the corporate veil to make the individual rather than the company liable

for the crime the individual committed. There was no need. There was no veil to

pierce in any criminal law case.

[15] The following brief statements of what each case cited by counsel was about

confirm that none of them suggests the existence of any principle that the separate

legal personality or corporate veil operates in criminal law to protect against

18 ibid (n 12) [8].

personal liability for crime. Salomon v Salomon & Co Ltd was an insolvency case

concerning whether the personal assets of a trader who had sold his business to a

company that he formed, and which became insolvent, could be accessed to

satisfy the debts of the company. Prest19 was a family law case in which a

divorced wife went after properties held by various companies by asserting that

the properties belonged to the husband and that the corporate veil should be

pierced. Jones v Lipman was a contract case concerning whether the court could

make an order for specific performance where the defendant had sold the subject

property to a company to put it beyond the reach of the court’s order. Boyle

involved recovering assets owned by a company by lifting the corporate veil to

treat the assets as belonging to two convicted directors. Seager & Blatch

concerned piercing the corporate veil in confiscation proceedings where the

company was a legitimate business and the directors acted as directors despite

being disqualified. R v Powell and Westwood20 also involved the question of

piercing the corporate veil in the context of criminal confiscation proceedings.

No Veil to Pierce in Criminal Cases

[16] A notable feature in R v Boyle Transport (Northern Ireland) Ltd21 was that the

two convicted directors did all the criminal acts over some years as part of the

operation of the company’s legitimate business. The greater income that was

earned from their criminal conduct went directly to the company and not to them.

Despite that fact, the two individuals were charged and not the company.22

Interestingly, the court observed that ‘it seems not to be the usual practice for the

prosecution to charge the company involved …’23 (Emphasis added).

[17] Boyle, therefore, demonstrates that where an individual, acting for and through a

company, personally performs criminal acts in conducting the company’s

business, that individual may be prosecuted. The individual gains no protection

from the existence of the separate legal personality of the company. There is no

need to elevate this proposition that emerges in Boyle to the level of principle: it

19 ibid (n 12). 20 [2016] EWCA Crim 1043. 21 [2016] 4 WLR 63. 22 ibid [120]. 23 ibid.

was simply the fact of that case. And, as gathered from the statement of the Court

of Appeal, it is what usually is done.

[18] No doubt, it is what is usually done because it works. And it works because the

veil that exists in company law cases is “rudely torn away” in criminal cases, as

it was expressed in Seager & Blatch. More accurately, perhaps, the criminal law

does not recognise the existence of the veil in criminal law. Or the criminal law

simply regards it as inapplicable or inoperable.

[19] It is clear that the appellant did the acts and the fact that he did them as agent for

the company simply confirms that he did them. The appellant never appealed the

finding that he personally performed the physical action and possessed, at the

time, the mental state required to establish the offences. Therefore, he has no basis

to complain – and his submissions contained more than a trace of complaint of

unfairness – that basic company law principle was undermined by the prosecution

charging him and not the company. The principle of separate legal personality he

invokes applies to company law and not to criminal law. There is no principle that

a criminal offence, committed in the name of a company, is the action of the

company and not of the individual who performed the criminal actions. In the

result, I would dismiss the ground of appeal relating to piercing the corporate veil.

Section 22 - Interpretation Act24

[20] The other ground of appeal is that ‘The Justices of Appeal erred when they found

s 22 of the Interpretation Act … was not applicable to the Appellant’s case.’ I

would also summarily dismiss this other ground of appeal because, even if it could

succeed, and it certainly cannot, it would make no difference to the decision of

the Court of Appeal upholding the convictions. The convictions would still stand.

[21] Section 22 provides:

(1) …

(2) Where an offence under any enactment ... has been committed by a

body corporate the liability of whose members is limited, then

notwithstanding and without prejudice to the liability of that body,

any person who at the time of such commission was a director, general

manager, secretary or other like officer of that body or was purporting

24 Cap 1, Laws of Barbados.

to act in any such capacity shall, subject to subsection (3), be liable to

be prosecuted as if he had personally committed that offence and

shall, if on such prosecution it is proved to the satisfaction of the court

that he consented to, or connived at, or did not exercise all such

reasonable diligence as he ought in the circumstances to have

exercised to have prevented the offence, having regard to the nature

of his function in that capacity and to all the circumstances, be liable

to the like conviction and punishment as if he had personally been

guilty of that offence.

(3) A person shall not be charged under subsection (2) except upon the

direction of the Director of Public Prosecutions.

[22] The appellant’s argument is that he should have been charged for being complicit

in a crime that was allegedly committed by the company, which s 22(2) enables.

On such a charge, he argued, s 22(3) states the mandatory precondition that “a

person shall not be charged under subsection (2) except upon the direction of the

Director of Public Prosecutions.” Therefore, the appellant contended, it would

have required the decision of the DPP to charge him. He could not have been

prosecuted upon the decision of the Commissioner of Police, as actually happened

in this case.

[23] It is an invidious submission. Implicit in the submission is that if it had been left

to the DPP, he would not have been personally prosecuted. The imputation seems

to be that the DPP would have been more advertent to the sanctity of separate

corporate personality and the deference due to the principle. Therefore, the DPP

would have known better than to charge him. So reduced to its essence, the

submission is utterly fanciful and calls for no profound discussion. It flies in the

face of the reality that the appellant was properly convicted for personally

committing the trademark offences. It is irrelevant whether he could have been

charged for complicity and not directly as the perpetrator. That he could have

been so charged, absolutely does not give rise to the proposition that he should

have been so charged.

[24] It was basic good sense to charge the appellant, as was done, for having personally

committed the offences. The last clause in s 22(2) renders an officer who was

complicit in an offence committed by a company liable ‘to the like conviction and

punishment as if he had personally been guilty of that offence.’ In this case the

appellant, as the Magistrate’s decision established, was personally guilty of the

offence. It would have been a mystery, at its kindest, why a prosecutor would

have charged the appellant as if he had been personally guilty, when he could

simply have been charged for being personally guilty.

[25] The appellant’s creativity in advancing this ground prompts the final observation.

Counsel aptly abstained from asserting any consequence as flowing from the

Court of Appeal’s decision that s 22 of the Interpretation Act was not applicable.

Creativity did not extend to submitting that because the appellant should have

been charged (which has been rejected) in reliance on s 22, the failure to do so

vitiated or in any way affected the validity of the convictions. In the end, there

was never any substance to this ground.

[26] Accordingly, I would dismiss the appeal.

CONCURRING JUDGMENT OF THE HONOURABLE MR JUSTICE WIT

AND MME JUSTICE RAJNAUTH-LEE:

[27] We agree grosso modo with the reasoning of Justice Barrow’s judgment and we

entirely agree with the conclusion he has reached. We believe that the judicial

“piercing of the corporate veil” doctrine as such has no place in criminal law

proper, in any event where statute law has been adopted to remove any uncertainty

or fill any gaps by providing specifically for criminal responsibility of certain

corporate officers who might be successful in hiding behind the corporate façade

without such a statutory basis. The doctrine may be useful, though, in criminal

confiscation proceedings. Clearly, the doctrine has been developed and is

necessary in the context of corporate civil liability which, in contradistinction to

corporate criminal liability, is still rather uncontroversial.

[28] Corporate civil liability and corporate criminal liability cannot be and surely have

never been dealt with in the same way. The philosophy and history of those

liabilities differ substantially. The corporation as a separate person with limited

liability was created to encourage investment and facilitate economic growth by

ensuring its shareholders a minimum of risk in the endeavours of their enterprise.

The concept was clearly not created and was never meant to encourage or

facilitate crime.

[29] In criminal law, personal or individual liability is the norm and usually the starting

point of attributing liability to a company. Corporate criminal liability requires in

most cases a construction of the acts and intentions of individual actors within the

corporation. English law, which is followed in Barbados, tends to be rather

hesitant to attribute criminal liabilities to the corporation as a whole. The English

courts have taken a restraint and relatively simple approach to imposing criminal

liability on corporations. Usually, the focus is on the actions of a person who is

considered to be a vital organ of the company and virtually its directing mind and

will, and who is acting in the sphere of duty assigned to that person (the

identification principle as developed in Tesco Supermarkets Ltd v Nattrass25).

This approach works relatively well in the case of small companies, but it may

create problems especially in cases where the corporation is large, its

organisational structure is complex and where the offences require a substantive

mental element, mens rea. For strict liability offences, however, it mostly suffices

that the acting person was an ordinary agent of the corporation acting in the sphere

of his or her duties.

[30] If criminal liability of the individual person can be thus attributed to the company,

both the individual person and the company may be liable. Both can be prosecuted

but the prosecutor may also choose to prosecute one of them. In this case the

individual person, who, according to the Magistrate and the Court of Appeal,

personally committed the actus reus, was prosecuted. The prosecutor simply

decided that it was not necessary to go further than that. There is in our view

nothing wrong with that decision.

[31] Although we uphold the outcome of the case as decided by the Court of Appeal,

we cannot endorse all their findings.

[32] Delpeache is individually liable not because, as the Court of Appeal stated, he

“was acting as an agent of the Company”. That determination is only necessary

25 [1972] AC 153.

in cases where the company is to be held vicariously or otherwise liable for the

acts of an individual connected to the company. Delpeache is criminally liable as

a person simply because he personally acted in violation of s 50A of the Act. As

would follow from the lower courts’ findings (which were not appealed to us):

the appellant himself exposed for sale and had in his possession, custody or

control the counterfeit goods, and he sold some of them, all “with a view to gain

for himself or another [the company] and without the consent of the registered

owner of the Puma trademark.” Whether or not he was an agent of the company

is of no relevance in this context. What was relevant, though, was that he acted

“in the course of a business.”

[33] The Court of Appeal not only stated that Delpeache “actually committed” the

actus reus but also that he had the mens rea of the offences charged. The latter

part of that statement is in our view incorrect because these offences do not require

mens rea as this is usually understood. The element “with a view to gain for

himself or another” does in any event not include an element of mens rea (R v

Zaman26). These offences are in fact strict liability offences, albeit with a

“hardship” or “due diligence” clause: s 50A(5). See, for example, Lord Nicholls

of Birkenhead in R v Johnstone27, dealing with s 92 of the Trade Marks Act 1994

(which is quite similar to s 50A of the Barbados Act): “The offences created by s

92 have rightly been described as offences of ‘near absolute liability’.”

[34] As Burgess JCCJ states in [80] of his judgment: mens rea offences are the

traditional criminal offences for which an accused may be convicted only if the

requisite mens rea is demonstrated by the prosecution. As already indicated, in

the case of these trademark offences the prosecution does not have to prove or

demonstrate mens rea in any form. On the contrary, s 50(5), like s 92(5) of the

English Act, “should be interpreted as imposing on the accused person the burden

of proving the relevant facts on the balance of probability.” (R v

Johnstone28). The Court of Appeal was therefore clearly wrong when it stated in

[37] of its judgment that the prosecution would have to prove “that the appellant

26 [2002] EWCA Crim 1862. 27 [2003] UKHL 28, [2003] 1 WLR 1736. 28 ibid.

did not have reasonable grounds to believe that the use of the sign in this manner

was not an infringement of the registered trade mark”.

[35] We agree with Barrow JCCJ that s 22(2) of the Interpretation Act does not apply

in this case. It does not apply for several reasons.

[36] First, s 22(2) renders a corporate officer of a certain category who had not

personally committed an offence committed by that body corporate nevertheless

liable to prosecution as if he had personally committed that offence. It further

renders him, despite not having committed (and therefore without more not being

guilty of) that offence, under certain circumstances, still liable to conviction and

punishment as if he had personally been guilty of that offence. It is understandable

that the legal acrobatics required by this provision should not take place without

the direction of the Director of Public Prosecutions, as stipulated by s 22(3). In

this case, Delpeache was prosecuted for offences he personally did commit and

of which he is personally found guilty. This alone excludes the application of s

22(2).

[37] Second, if the reasoning of the appellant were followed properly, s 50E of the Act

and not s 22(2) should be applied. The former provision identifies practically the

same corporate officers under similar circumstances as mentioned in s 22(2) as

personally guilty of the offence committed by the body corporate. Where s 50E

squarely provides that such an officer is guilty of the offence, no “as if” situation

as contemplated by s 22 occurs.

[38] Third, ss 22(2) and 50E do not cover the same ground at least not in the same

way, but even if we were to conclude that they did, the legal maxim generalia

specialibus non derogant, or better even, its converse

generalibus specialia derogant would seem to apply.29 Although the application

of that maxim is most remarkable and impacting when the general provision is of

a later date than the special one (and the legal maxim therefore clashes with and

defeats another one (lex posterior derogat legi priori, ie the later law overrides

the older one), it does not mean that the maxim does not apply when, as is the

29 This maxim ''… is not a technical rule peculiar to English statutory interpretation. Rather it represents simple common sense

and ordinary usage.'' Lord Cooke of Thorndon in Effort Shipping Co Ltd v Linden Management SA, The Giannis NK [1998] 1 All

ER 495 at 513.

case here, the special provision (50E) is of a later date than the general one (s

22(2)). On the contrary, it is then that both legal maxims point in the same

direction: the special later law overrides the older general law. That would be the

case here.

[39] We note in passing that both s 50 E and s 22(2) provide that both the corporation

and the corporate officer will be equally considered guilty and equally liable.

Importantly, both provisions seek to expand corporate criminal liability or, put

another way, to facilitate getting to those individuals behind the corporate façade

who may be responsible or co-responsible for a criminal act but whose criminal

liability cannot be established by using the traditional concepts of perpetration or

complicity. Although the “consent or connivance” component covers most of the

complicity variants that are already known in criminal law, the “attributable to

any neglect” component clearly expands existing forms of complicity. See, for

example, Michael Allen30, who describes a similarly worded provision: “While

this largely duplicates the liability imposed by the criminal law on perpetrators or

accomplices, it does extend it and it may also make the task of the prosecution

easier where proving liability under the normal principles would be difficult.” See

further Smith and Hogan31, where the authors state: “As far as ‘consent’ and

‘connivance are concerned, these provisions probably effect only a slight

extension of the law; because the officer who expressly consents or connives in

the commission of the offence will be liable as a secondary party under the

principles considered under Ch 6. There may, however, be a case of consent which

does not amount to counseling or abetting; and the words ‘attributable to any

neglect on the part of’ clearly impose a wider liability in making the officer liable

for his negligence in failing to prevent the offence.”

[40] Therefore, as a matter of principle, corporate officers and their company may be

equally held liable for the same statutory offence. Justice Burgess has suggested

that this principle must be read subject to s 50E(1) of the Act, thereby narrowing

the scope of the culpability of corporate officers. We strongly disagree. As

demonstrated above, s 50E broadens that scope of culpability. It may, as

Blackstone put it, “have the effect of casting the net of individual responsibility

30 Textbook on Criminal Law (8th edn, OUP 2005)at 234. 31 J C Smith, D C Ormerod and K Laird, Smith, Hogan and Ormerod’s Criminal Law, (15th edn, OUP 2018) at 257.

more widely.”32 As explained by Smith and Hogan33, there are many ways to

prosecute criminal behaviour of corporations or their principal officers and the

first way to do that is to prosecute individuals in a corporation “for their personal

wrongdoing just as any other human being.” Where this and other methods fail, s

50 E may provide an additional path. This section statutorily determines how the

corporate veil should be pierced but only as far as that would be necessary. As

stated before, the jurisprudential doctrine of piercing that veil has no role to play

here.

[41] In conclusion we would make a few practical comments. When writing reasons

for a decision in a criminal matter, it would be best practice to set out the charges

in full, whereafter it should be indicated with precision to what extent these

charges have been proved, to be followed by an exposé of the relevant evidence.

For example, setting out in this case both the charges and the statement of what

exactly of those charges had been proved would have revealed that the first

offence was not one contrary to s 50A (1) (a) as Delpeache was not accused of

applying the PUMA sign to the goods but only of exposing them for sale, contrary

to s 50A (1) (b). It would also have revealed that the third charge was incomplete

as it failed to state that the possession, custody, or control of the goods was “with

a view to the doing of anything, by himself or another, which would be an offence

under paragraph (b)”, which is an element of the offence under s 50A (1) (c).

Further, the reasons of the Magistrate do not reveal if he found proved that all the

goods mentioned in the first (and second) charge had been exposed for sale or just

some of them. Nor is it clear if he found proved that all these goods were in the

possession, custody or control of the accused (with a view to sell them). If it was

proved that a part of these goods had been exposed for sale and another part kept

in stock with a view to sell them at some point in time, then imposing a fine for

each of these offences can be considered appropriate. However, if the Magistrate

found that all these goods had been exposed for sale by the accused who

necessarily also had possession, custody or control of these goods, then, as two

separate offences would have arisen from the same facts, the imposition of one

fine would have been the proper thing to do. For Delpeache this may all be water

32 D C Ormerod and D Perry, Blackstone Criminal Practice 2021(31st edn, OUP 2020) at 136. 33 ibid.

under the bridge as the appeal was not made on these grounds but one hopes that

these remarks may provide some guidance in future cases.

DISSENTING JUDGMENT OF THE HONOURABLE MR JUSTICE

BURGESS:

Introduction

[42] The House of Lords decision in Salomon v Salomon & Co Ltd,34 which

established for the first time that the incorporated company has a legal personality

of its own separate from its incorporators, shareholders, and directors, is now

treated as a hallowed principle across the Commonwealth and in the United

States. Unsurprisingly then, the Salomon principle, as that principle is

affectionally known, is the foundation stone upon which company law in

Barbados has been erected.

[43] The dispositive question in this appeal concerns the implication of this

foundational principle for the criminal liability of a corporate director for statutory

offences committed in the corporate context. More specifically, that question is

this: To what the extent can the Salomon principle be ignored by the respondent,

the Commissioner of Police, in the prosecution of the appellant, the sole director

of a one-person company, Ouch Boutique Inc, for offences pursuant to s

50A(1)(b) and (c) of the Trade Marks Act Cap 319 (Cap 319)?

[44] Local economists tell us that one-person incorporated small businesses are

responsible for a substantial portion of the macroeconomic business activity in

Barbados and are also especially important in the diversification of business

ownership in that country. The answer to the question raised in this appeal,

therefore, will undoubtedly have monumental implications for these incorporated

small businesses.

Factual Background

[45] The facts giving rise to this appeal are tolerably uncomplicated.

34 ibid (n11) at [57].

[46] The appellant is the sole director of Ouch Boutique Ltd (Ouch Boutique), a limited

liability company incorporated in Barbados under the Companies Act Cap 308

(Cap 308). Ouch Boutique was incorporated in 2012 to take over the appellant’s

business which he had operated as a sole trader since 2006. After the incorporation

of Ouch Boutique, the appellant entered the employment, and became an

employee, of the company.

[47] At all material times, Ouch Boutique operated its business from an upstairs and

down-stairs premise situated in Swan Street, Bridgetown. Upstairs was a

storeroom which was not open to the public. Downstairs was the store where

specialised “non-brand” and “elite brand” clothing including Adidas, Nike and

Puma were sold to the public.

[48] On Saturday 13 May 2017, Ms Monee Hope went to Ouch Boutique’s store to

purchase a pair of Puma slippers. She saw slippers on display in the store on top

of one of the clothes racks in the store. She entered the store and asked the store

attendant if the store had Puma shoes. Having been assured by the store attendant

that a pair of slippers were Puma slippers, she purchased them from the store.

[49] Ms Hope went to the cashier to pay for the slippers and was told by the cashier

that the price of the slippers was $100.00 instead of $200.00 which she saw

displayed on the slippers. She paid by debit card and was given a machine receipt.

However, she asked for a store receipt, and she was given one which had Ouch

Boutique’s address on it. She put the slippers in her bag and left the store.

[50] On reaching home, Ms Hope realised that the quality of the pair of slippers she

had bought did not match the quality of another pair she had at home which she

had bought in New York for US$150.00. She contacted her father, Mr Mark Hope,

who coincidentally was Puma’s representative in Barbados. He advised her to

contact the police.

[51] Ms Hope attended the Fraud Investigation Unit of the Royal Barbados Police

Force and gave a statement in which she explained that at the time she purchased

the slippers she believed them to be genuine Puma products, but that in fact they

were not. Ms Hope handed over the pair of slippers to the police.

[52] Subsequently, a warrant was executed at Ouch Boutique and the police seized

seventeen pairs of slippers, seven single shoes and thirty-one haversacks which

they believed to be fake Puma products.

[53] On 24 November 2017, the appellant was arrested and charged with three offences

pursuant to Cap 319 as follows:

i. that he, with a view to gain for himself or another or with intent to

cause loss to another, and without the registered owner of a trademark,

to wit Puma, did expose for sale goods namely, seventeen pairs of

slippers, seven single shoes and thirty -one haversacks which bear a

sign identical to or likely to be mistaken for a registered trademark of

Puma contrary to s 50A (1) (a) and (b) of Cap 319;

ii. that he, with a view to gain for himself or another or with intent to

cause loss to another, and without the registered owner of a trade

mark, to wit Puma, did have in his possession, custody or control in

the course of business, goods to wit: seventeen pairs of slippers, seven

single shoes and thirty -one haversacks which bear a sign identical to

or likely to be mistaken for a registered trade mark of Puma contrary

to s 50A(1) (c) of Cap 319;

iii. that he, with a view to gain for himself or another or with intent to

cause loss to another, and without the registered owner of a trademark,

to wit puma, did sell goods to wit: one pair of PUMA Fenty by

Rihanna slippers which bore a sign identical or likely to be mistaken

for a registered trademark of Puma contrary to s 50A of Cap 319.

These charges are sometimes referred to by me as the charged offences.

[54] The appellant was tried on these charges before His Worship, Magistrate

Graveney Bannister, in the Magistrate’s Court of District “A” (Criminal Division)

on 14 and 24 January 2018 and 14 and 19 February 2018.

[55] At the end of the hearing of the evidence on 19 February 2018, Mr Kissoon, the

then counsel for the appellant, made his submissions to the court. Referring to s

50E(1) of Cap 319, he argued, inter alia, that it was the company, Ouch Boutique,

which should have been charged and not the appellant. The magistrate rejected

this argument and convicted the appellant on all three charges.

[56] Being dissatisfied with the decision of the magistrate, the appellant appealed to

the Court of Appeal on the grounds, inter alia, that the magistrate erred in holding

that the appellant, and not Ouch Boutique, was properly charged. The Court of

Appeal (Narine, Belle and Cumberbatch JJA) dismissed the appeal on all grounds.

On the only ground now before us, Belle JA, who delivered the judgment of the

court, held as follows:

“[100] The question arises then, what bearing this exposition of the law

have (sic) on Delpeache’s case? The answer is that Delpeache was

acting as an agent of the Company and committing the charged

offences himself. There was no need therefore under the statutory

provisions of Cap 319 to find evidence of benefit, either by

Delpeache or Ouch Boutique. There was no need to determine

whether the property belonged to Ouch Boutique. The prosecution

followed the evidence, some of which was given by the appellant

himself, to the effect that he travelled to New York to obtain the

offending goods, to place in his store. He mounted the goods for

sale and was responsible for the sale of the goods in the store Ouch

Boutique.

[101] It is not because he is the director of a one man company that

matters. Rather it is because he actually committed the actus reus

and had the mens rea of the offences charged. There was therefore

no need for the prosecution to prove concealment, evasion, shelter

or the existence of a cloak or sham and lift the corporate veil.

[103] In our view…jurisprudence emerging from the authorities on

“piercing the corporate veil” establishes that there is no need to

pierce the corporate veil in a case such as the appellant’s. Even

though we do not agree with counsel for the Crown that the

appellant should have been prosecuted because the company Ouch

Boutique was a small company and the appellant was the directing

mind, we do hold that the appellant clearly acting as an agent of

the company when he purchased the goods, delivered them to

Ouch Boutique, displayed them in the store for sale, and actually

sold a pair of the counterfeit shoes. This was sufficient in our view

to justify his prosecution.”

Issue In This Appeal

[57] The appeal before us raises a single issue. It is whether the Court of Appeal was

correct in holding that the appellant was properly charged and convicted of

committing the charged offences in his personal capacity on the basis that he acted

as an agent of Ouch Boutique.

[58] As already intimated, that issue is of surpassing importance to incorporated small

businesses in Barbados. Consequently, I consider it advantageous to revisit some

basic principles which have direct implications for the specific issue before us. In

my judgment, the first such set of principles relate to the right to incorporate in

Barbados and the effect of such incorporation.

Analysis and Conclusions

1. Ouch Boutique Ltd was a Separate Legal Personality from the Appellant

[59] The jumping-off point in approaching this case is s 4 (1) of Cap 308 which

provides that “…one or more persons may incorporate a company by signing and

sending articles to the Registrar…” The undoubted effect of this provisions is to

confer a right on a person or persons to incorporate a company. In Commonwealth

Caribbean Company Law35, this right has been described as ample and subject

only the limitation that the company must not be formed for a purpose contrary

to law or for an illegal purpose.

[60] It is this right to incorporate which the appellant exercised in 2012 when he

incorporated Ouch Boutique to take over the business which he was conducting

as a sole trader. The appellant, like so many small businessmen in Barbados, no

doubt incorporated Ouch Boutique to take advantage of one of the most

consequential principles of Barbadian company law; the rule that a company

incorporated under the Cap 308 is a legal entity separate and distinct from its

shareholders or its incorporators.

[61] The Salomon principle is not a mere technical rule. In practical business terms,

this principle means that a company, once incorporated, enjoys rights and is

subject to liabilities (civil and criminal) different from those enjoyed or borne by

its incorporators or shareholders.36 The principle is captured in company law

theory by the metaphor that a company has a separate legal personality.37 Indeed,

the metaphor continues that on incorporation, a veil, called the “veil of

incorporation”, is drawn between the company’s personality and that of its

incorporators or its shareholders or its directors.38

35 (Routledge 2013) at 42. 36 Macaura v Northern Assurance Co [1925] AC 619, 626; Short v Treasury Commissioners [1948] AC 534, 545; JH Rayner (Mincing Lane) Ltd v Department of Trade and Industry [1990] 2 AC 22. 37 Salomon (n 11). 38 See Persad v Singh [2017] UKPC 32 (TT) at [20].

[62] In Salomon v Salomon & Co Ltd, Lord Macnaughten, whose judgment is widely

regarded as a legal classic, described the principle as follows:39

i. “The company is at law a different person altogether from the

subscribers…and though it may be that after the incorporation the

business is precisely the same as it was before, and the same hands

receive the profits, the company is not in law the agent of the

subscribers or trustee for them. Nor are the subscribers, as members

liable, in any shape or form, except to the extent and in the manner

provided by the Act.”

[63] The Salomon principle was recently applied in the Barbados Court of Appeal in

ANSA McAL (Barbados) Ltd v Banks Holding Ltd and SLU Beverages Ltd.40 In

that case, AMCDV was a wholly owned subsidiary of ANSA McAL incorporated

by ANSA McAL for the special purpose of making competing bids for the take-

over of Banks Holding Ltd. A question arose as to whether ANSA McAL could be

treated as the bidder. Burgess JA answered at para [110]:

“In law, AMCDV was a separate legal personality and so was therefore the

“bidder”. The fact that AMCDV was the wholly owned subsidiary of Ansa

did not in any way subsume AMCDV within Ansa thereby transmogrifying

Ansa into a bidder…There can be no dispute that, in law, Ansa always

enjoyed a separate legal personality distinct and separate from AMCDV…”

[64] I would add here, in giving context, that Salomon case itself is early authority that

the corporate personality principle applies equally in the case of a one-person

company, as here, where the beneficial owner of the company may be in fact

indistinguishable from the company.41 In any event, the legal position of such a

company is now governed legislatively in Barbados by express provision in s 4

(1) of Cap 308 that “…one or more persons may incorporate a company”.

[65] Given the foregoing, there can be no doubt that Ouch Boutique after incorporation

was in law a separate legal person from the appellant, its incorporator and sole

director. Indeed, by s 17 of Cap 308, Ouch Boutique had “the capacity, rights,

powers and privileges of an individual”. Consequently, Ouch Boutique was fully

capable of operating a business; of ownership of goods; of “exposing for sale”

39 ibid (n 11) 51. 40 (Barbados CA, 11 December 2015). 41 Persad v Singh [2017] UKPC 32 (TT) at [20].

such goods; of having “in its possession, custody or control in the course of

business” such goods; and of “selling” such goods. In fact, the undisputed

evidence is that Ouch Boutique did all these things as a matter of course in the

conduct of its business. Given this, the question then becomes: Did Ouch

Boutique do these things in relation to the offences for which the appellant was

charged and thereby commit those offences?

2. Whether Ouch Boutique Committed the Charged Offences

[66] In my judgment, in answering this question, six things stand out in the evidence

given by the prosecution.

[67] First, Ouch Boutique operated its business from an upstairs and down-stairs

premise situated in Swan Street, Bridgetown. Those premises were the premises

of Ouch Boutique.

[68] Second, upstairs was a storeroom for goods which were not being sold and it was

not open to the public. It is here, according to the Police’s evidence, that the goods

for which the appellant was charged as having “in his possession, custody or

control in the course of business” were found.

[69] Third, downstairs was the store where goods were sold to the public. As already

intimated, the evidence of the prosecution was that this was the premises of Ouch

Boutique.

[70] Fourth, according to Ms Monee Hope, she went to Ouch Boutique’s store to

purchase the goods in question. There was no evidence that she contemplated

purchasing or purchased the goods from the appellant.

[71] Fifth, according to Ms Monee Hope also, the goods were on display in Ouch

Boutique’s store.

[72] Sixth, Ms Monee Hope’s further testimony was that the sale was conducted by an

employee of Ouch Boutique and that she asked for a store receipt which she was

given by a cashier, and which had Ouch Boutique’s address on it.

[73] Notwithstanding those facts, the Court of Appeal did not give any consideration

whatsoever as to whether Ouch Boutique could be criminally liable in respect of

the offences with which the appellant was charged. Instead, that Court baldly

stated that the appellant was properly convicted because he “was acting as an

agent of the company when he purchased the goods, delivered them to Ouch

Boutique, displayed them in the store for sale and actually sold a pair of the

counterfeit shoes”. I digress here to note that the appellant was never charged with

purchasing the goods and delivering them to Ouch Boutique, even though there

may have been evidence that he did these things.

[74] I must confess significant difficulty with the failure of the Court of Appeal to

consider whether there was evidence that Ouch Boutique committed the charged

offences. This is because s 50A (1) of Cap 319, the section under which the

appellant was charged, imposes criminal liability on “a person who commits an

offence” created by that section. S 36 of the Interpretation Act Cap 1 (Cap 1)

stipulates that “person” includes a company with the consequence that a company

is fully capable of committing an offence under s 50A(1).

[75] But even more importantly, s 50E(1) of Cap 319 makes provision for the

prosecution of a director, secretary, or similar officer “where an offence under

this Act…has been committed by a body corporate…” That provision only makes

sense if it imposes a requirement that as a pre-condition to the prosecution of a

relevant corporate officer it must be determined that the evidence reveals that their

company has committed a s 50A(1) trademark offence. I would stress here that

the requirement is not that the company has been prosecuted for, or has been

convicted of, committing. The requirement is that the company has committed a

trademark offence.

[76] I must express a further difficulty with the Court of Appeal’s view that the

appellant was properly convicted because he “was acting as an agent of the

company” when he committed the charged offences. As Rajnauth-Lee and

Burgess JJCCJ in delivering the judgment of this Court in Bay Trust Corporate

Services Ltd v Longsworth42 observed, a company is a persona ficta deemed to

42 [2020] CCJ 8 (AJ) BZ [28].

exist and to have the powers, rights, and the liabilities of a natural person. As a

fictional person, it is axiomatic that a company must act through its servants and

agents and can only commit criminal offences through those servants and agents.

If, therefore, a company were able to disown corporate criminal liability on the

footing that, as held by the Court of Appeal, a person “was acting as an agent of

the company and committing the charged offences himself” any notion that a

company could ever be held criminally liable would be entirely at risk.

[77] To the contrary, however, the very well settled law is that a company may incur

criminal culpability for the unlawful acts of its servants and agents.43 In mapping

such culpability, it may be well to recall that there has developed a system of

classification which segregates statutory offences into absolute offences, strict

liability offences and mens rea offences, according to the degree of intent, if any,

required to create culpability. The amenability of companies to criminal liability for

statutory offences depends upon this classification.

[78] Absolute liability offences are offences where, by the clearest intendment, liability

arises instantly upon the breach of a statutory prohibition. No specific state of mind

is a prerequisite to guilt. With such offences, corporate and individual culpability

arises on the basis of automatic primary responsibility.

[79] Strict liability offences are offences where guilt is not predicated upon the automatic

breach of the statute but rather upon the establishment of the actus reus, subject to

the defence of mistake of fact. As in the case of an absolute liability offence, it

matters not whether the accused is a company or an individual, because the liability

is primary and arises in the accused according to the terms of the statute. As with

absolute liability offences, the culpability of the company is not dependent upon the

attribution to the accused of the misconduct of others. This is evident in the case of

Tesco Stores Ltd v Brent Borough Council44 where the guilty knowledge of a

checkout girl was enough to ensure the conviction of a company for breach of a

provision in the Video Recordings Act 1984 (UK).

43 See Moore v Bresler Ltd [1944] 2 All ER 515; Tesco Supermarkets Ltd v Natrass [1972] AC 153 44 [1993] 2 All ER 178.

[80] Mens rea offences are the traditional criminal offences for which an accused may

be convicted only if the requisite mens rea is demonstrated by the prosecution. It is

now firmly established law that, even in the case of a mens rea offence, a company

may be affixed with criminal liability for the actions of its servants or agents. As

explained by Estey J in the Supreme Court of Canada in the case of Canadian

Dredge and Dock Co Ltd v The Queen,45 that law is based on the operation of the

identification theory. The underlying premise of this theory is that if the servant or

agent who committed the offence is found to be a vital organ of the company and

virtually its directing mind and will in the sphere of duty assigned him/her so that

his/her actions and intent are the actions and intent of the company itself, the

company can be held criminally liable. The wrongful action of the servant or agent,

the primary representative, by attribution to the corporation, creates primary rather

than vicarious liability. The identification doctrine merges the company and the

actions and intent of the servant or agent to whom was delegated the governing

authority of the company and criminal responsibility is thereby attributed to the

company.

[81] To be clear, the Court of Appeal did not hold that Ouch Boutique was the agent

of the appellant. In that regard, the case of Salomon46 makes it plain that a

company is not automatically an agent of its members. However, the House of

Lords in that case did not deny the possibility of a company being in fact an agent

of its members. In Adams v Cape Industries plc,47 the English Court of Appeal

accepted to be settled law that if it can be shown by clear evidence that the

company acted as an agent of its members or a subsidiary as agent of its parent,

then, on ordinary agency principles liability will attach to all or any of its

individual members and not the company or to the principal parent and not to the

subsidiary. I feel bound to underline here that this is not the principle which the

Court of Appeal was seeking to invoke and so is not at issue in this appeal.

[82] What is at issue before us is whether there was evidence that Ouch Boutique was

criminally liable for the charged offences committed through the agency of the

appellant. As it appears to me, Ouch Boutique was so liable even if the charged

45 [1985] 1 SCR 662. 46 (n 11). 47 [1990] Ch 433.

offences required mens rea. This is so because the appellant was not just an

ordinary agent of Ouch Boutique: he was the sole shareholder and director of that

company. As such, he was undeniably a vital organ of that company and was its

“directing mind and will”. In those circumstances, the settled law is that the

criminal conduct of the appellant would be attributed to Ouch Boutique thereby

rendering that company liable for committing the charged offences. In sum, it

matters not whether the charged offences were, absolute offences, strict liability

offences or mens rea offences, Ouch Boutique was criminally liable for the

commission of those offences.

3. Whether the Appellant could be Prosecuted for the Charged Offences

[83] The question now becomes whether the appellant can be prosecuted for the

charged offences notwithstanding that it is Ouch Boutique which in law

criminally committed those offences. In my judgment this question is best

answered under three heads, namely, (i) general principles, (ii) s 50E(1) of Cap

319 and (iii) s 22(2) and (3) of Cap 1.

(i) The General Principle

[84] As a general principle, even if the acts of the directing mind and will were in law

those of the company does not prevent the prosecution and conviction of the

servant or agent as a principal or aider and abettor where the company may be

held to have also committed the offence: R v Fell (1981) 64 CCC (2d) 456 (Ont

CA). Further, convictions of both the agent and the company for the same offence

is permissible even where the agent is the sole director and shareholder and

directing mind of the company: R v Shamrock Chemicals Ltd (1989) 4 CELR (NS)

215 (Ont Dist Ct).

[85] Thus, in Professor Glanville Williams’, Textbook of Criminal Law (1978), the

learned author writes at 946-47 as follows:

ii. The device of incorporation does not protect people who commit

offences. A company can act only through human beings, and a

human being who commits an offence on account of or for the benefit

of a company will be responsible for that offence himself just as any

employee committing an offence for a human employer is liable.

iii. . . . . .

iv. Where a company is liable under the identification doctrine, the

director or other controlling officer will almost always be a co-

perpetrator of or accessory in the offence or commit a statutory

offence.

[86] A similar view is to be found in the very useful work by Professor Peter Gillies,

The Law of Criminal Complicity (1980), where the author writes at 151:

v. [W]here the criminal act is committed by a senior officer who is

capable of so representing the company as to make his act his own,

and the offence is such that either the company or the officer is

capable of committing it as a principal offender, the classification of

each party may be arbitrary. They may be viewed as being principal

and accessory (so that the officer aids or counsels the company or

vice-versa), or alternatively, as being joint principals.

[87] On the authorities, then, there is little or no doubt that, as a general principle, a

director or other similar corporate officer may be held liable for a statutory

offence where their company may also be held to have committed that offence. In

my view, however, in the appeal before us, this general principle must be read

subject to s 50E(1) of Cap 319 and s 22(2) and (3) of Cap 1 in this case.

(ii) Section 50E(1) of Cap 319

[88] To fully understand the operation of this general principle in the context of the

prosecution of the trade mark offences in Cap 319, it is necessary to go back to

some first principles. In this regard, it is well to recall the basic principle that a

person may only become particeps criminis in one of two ways. The first is by

physically perpetrating the crime as the principal offender. Such an offender is

usually called a principal in the crime. The second way is by a derivative form of

accessorial liability in the sense that the person instigates, encourages, or assists

the principal offender in the commission of the crime. Such a person is an

accessory, or secondary party.

[89] Against that backdrop, it is easy to see that the general principle that the servant

or agent may be prosecuted as a principal or aider and abettor for an offence

committed by his company is significantly modified by s 50E(1) of Cap 319 in

relation to the trademark offences under s 50A of that Act. Section 50E(1)

provides as follows:

i. Where an offence under this Act which has been committed by a body

corporate is proved to have been committed with the consent or

connivance of, or to be attributable to any neglect on the part of, a

director, manager, secretary or other similar officer of the body

corporate, or any person who was purporting to act in any such

capacity, he as well as the body corporate, shall be guilty of that

offence and shall be liable to be proceeded against and punished

accordingly.

[90] The language of this subsection is crystal clear. The subsection is triggered where

a company has committed an offence under Cap 319. In such an eventuality, a

director or other corporate officer is liable to be proceeded against criminally only

where the offence “is proved to have been committed with the consent or

connivance of, or to be attributable to any neglect on the part of such officer”.

Simply put, s 50E(1) applies as long as there is evidence that the company is the

person who committed the offence and as such the criminal liability of the

company is that of the principal offender. By requiring that the consent,

connivance or neglect of the director or other corporate officer to the commission

of the offence be proved, the director or other corporate officer, the criminal

liability of a director or other corporate officer is as an accessory or secondary

party.

[91] It bears emphasising that, under this subsection, the company is liable for the

commission of the offence as a principal and that the director or other corporate

officer is liable to be proceeded against and punished as an accessory or secondary

party. In this way, s 50E(1) modifies the general principle of the culpability of

corporate officers for trademark offences committed by a company. Section

50E(1) must therefore be seen as reforming the general principle and not as

merely repeating that principle.

[92] Au fond, s 50E(1) is a statutory recognition of the business and economic

importance of the separate legal personality principle and the necessity to preserve

the ‘corporate veil’ which is drawn by Cap 308 in the case of companies

incorporated under that Act. In furtherance of this objective, s 50E(1) allows for

the corporate veil to be withdrawn or pierced in cases of trademark offences

committed by the company and for specified corporate officers to be held liable

but only as secondary parties and in those circumstances specified in that

subsection.

[93] In my further judgment, as s 50E(1) is a veil piercing provision, it must be strictly

adhered to. According to the subsection, the consent or connivance or neglect of

the director or other corporate officer in the offence committed by the company

must be alleged and proved. In this case, these things were neither alleged nor

proved. Consequently, as argued by counsel for the appellant before Magistrate

Bannister and by counsel before this Court, the appellant should not have been

prosecuted as a principal offender and held guilty of the offences charged and

therefore should not have been punished for them.

(iii) Section 22(2) and (3) of Cap 1

[94] Section 22(2) and (3) of Cap 1 legislates generally for the prosecution of corporate

officers in respect of offences under any enactment committed by a company.

Section 22(2) and (3) of Cap 1 provides as follows:

“(2) Where an offence under any enactment…has been committed by a

body corporate the liability of whose members is limited, then

notwithstanding and without prejudice to the liability of that body,

any person who at the time of such commission was a director, general

manager, secretary or other like officer of that body or was purporting

to act in any such capacity shall, subject to subsection (3), be liable to

be prosecuted as if he had personally committed that offence and

shall, if on such prosecution it is proved to the satisfaction of the court

that he consented to, or connived at, or did not exercise all such

reasonable diligence as he ought in the circumstances to have

exercised to prevent the offence, having regard to the nature of his

functions in that capacity and to all the circumstances, be liable to the

like conviction and punishment as if he had personally been guilty of

that offence.

(3) A person shall not be charged under subsection (2) except upon the

direction of the Director of Public Prosecutions.”

[95] On its plain words, s 22(2) deals with the criminal liability of “a director, general

manager, secretary or other like officer of that body” (a specified corporate

officer) in two stages. The first stage deals with the “prosecution” of a specified

corporate officer. In this regard, the subsection allows a specified corporate

officer, without more, “to be prosecuted as if he had personally committed” a

statutory offence committed by his/her company. The second stage deals with the

“conviction and punishment” of a specified corporate officer. Here, the subsection

provides that a specified corporate officer, may only be convicted if on

prosecution it is proved that that officer “consented to, or connived at, or did not

exercise reasonable diligence in”, the commission of the offence by the company.

It is important to note here that s 22(2) imposes criminal liability on a specified

corporate officer as a principal and not as an accessory like s 50E(1).

[96] Section 22(2) is undeniably a veil piercing provision as it allows (i) for the

prosecution of the specified corporate officer as a principal for an offence

committed by a company and (ii) for his/her conviction for the commission of

such an offence as a principal provided consent, connivance or neglect is proved

during such prosecution. It is patent that s 22(2) opens the veil of incorporation

much wider than s 50E(1) of Cap 319. However, respect for the Salomon principle

is maintained in Cap 1 by the proviso to s 22(2) in s 22(3) which stipulates to the

effect that a specified corporate officer “shall not be charged under subsection (2)

except upon the direction of the Director of Public Prosecutions”.

[97] The s 22(3) proviso is of signal importance in the jurisprudence of separate legal

personality and corporate criminal liability. By stipulating that a corporate officer

“shall not be charged” for statutory offences committed by a company except

upon the direction of the Director of Public Prosecutions, Parliament has evinced

an unmistakable intention that corporate officers are not to be lightly charged for

offences committed by their companies. Simply put, s 22(2) permits the corporate

veil to be lifted and certain corporate officers to be prosecuted for offences

committed by their companies but, by s 22(3), such prosecution can only be

pursued on the direction of the Director of Public Prosecutions.

[98] There is no evidence in this case that the Director of Public Prosecutions gave any

directions that the appellant be charged. The settled law is that the absence of such

evidence rendered the prosecution of the appellant before the magistrate a nullity:

R v Angel48 and R v Pearce49. That being so, I agree with counsel for the appellant

48 [1968] 2 All ER 607. 49 (1981) 72 Cr App R 295.

that the appellant was not properly charged and therefore prosecuted and

convicted for the charged offences.

(iv) Remarks on s 50E(1) and s 22(2) and (3)

[99] I feel compelled to make three observations on the operation of s 50E(1) and s

22(2) and (3). The first is that these sections do not differentiate between absolute

liability offences, strict liability offences and mens rea offences. In my judgment,

the need for strict adherence to the stipulations in those provisions must therefore

be complied with in the prosecution of a specified corporate officer for any

category of trademark offence committed by the company.

[100] The second is provoked by an argument by counsel for the respondent that s 22(2)

and (3) of Cap 1 cover the same subject area as s 50E(1) of Cap 319 and that the

legal maxim generalia specialibus non derogant applies so that the general rule

in s 22(2) and (3) of Cap 1 has no application in this case as it cannot derogate

from the special rule in s 50E(1) of Cap 319. To accept this argument would

involve turning that legal maxim on its head.

[101] The legal maxim generalia specialibus non derogant has long been understood to

mean that general words in a later statute cannot exclude the specific provisions

of the earlier statute. Accordingly, Halsbury Laws of England Statutes and

Legislative Process50 states as follows:

It is difficult to imply a repeal where the earlier enactment is particular, and

the later general. In such a case the maxim generalia specialibus non

derogant (general things do not derogate from special things) applies. If

Parliament has considered all the circumstances of, and made special

provision for, a particular case, the presumption is that a subsequent

enactment of a purely general character would not have been intended to

interfere with that provision; and therefore, if such an enactment, although

inconsistent in substance, is capable of reasonable and sensible application

without extending to the case in question, it is prima facie to be construed

as not so extending. The special provision stands as an exceptional

provision upon the general. If, however, it appears from a consideration of

the general enactment in light of the admissible circumstances that

Parliament’s true intention was to establish thereby a rule of universal

application, then the special provision must give way to the general.

50(5th edn, 2018) vol 96.

[102] The learned authors of Bennion on Statutory Interpretation51 describe the

operation of the maxim as follows:

i. General and specific enactments in different Acts

ii. Where the literal meaning of a general enactment covers a situation

for which specific provision is made by another enactment contained

in an earlier Act, it is presumed that the situation was intended to

continue to be dealt with by the specific provision rather than the later

general one. Accordingly, the earlier specific provision is not treated

as impliedly repealed.

iii. The presumption in this context is sometimes expressed in terms of

the maxim generalia specialibus non derogant (a general provision

does not derogate from a special one), which is in Jenkins’ Exchequer

Reports.

iv. The explanation of the rule by Lord Selbourne LC in Seward v The

Vera Cruz (Owners), The Vera Cruz52 is often cited

“…where there are general words in a later Act capable of

reasonable and sensible application without extending them to

subjects specifically dealt with by earlier legislation, you are not

to hold that earlier and special legislation indirectly repealed,

altered or derogated from merely by force of such general

words, without any indication of a particular intention to do so.”

[103] The upshot of the foregoing is that for the maxim to apply the specific Act must

have been enacted before the general Act. This is not the case in this appeal.

Section 22(2) and (3) of Cap 1, the general provision, was enacted long before s

50E(1) of Cap 319, the specific provision. Accordingly, the maxim generalia

specialibus non derogant does not assist the respondent’s argument that the

general rule in s 22(2) and (3) of Cap 1 has no application in this case.

[104] The third observation relates to mens rea offences committed by a company. As

seen above, the liability for the commission of such offences depends upon the

identification doctrine, namely, that the company may only be affixed with

liability for the actions of its servant or agent where the individual is a vital organ

of the company and its “directing mind and will”. It is to be noted that the

identification principle was developed in cases where the corporate defendant was

51 D Bailey and L Norbury, Bennion, Bailey and Norbury on Statutory Interpretation (8th edn, Lexis Nexis 2020). 52 (1884) 10 App Cas 59 at 68.

a large company with many shareholders, employees, and directors. The principle

works very well in respect of such companies because there is unlikely to be

significant overlap between identity of the corporate owners and the company

itself.

[105] The position is very different where, on the other hand, the company is a small,

closely held company. In such a case, the individual owner is invariably the

directing mind and will of the company and as such liable to be prosecuted for

offences committed by the company. Thus, if the right to incorporate a one-person

company conferred by Cap 308 is to have meaning, courts much be particularly

vigilant in mens rea offences in insisting on the strict observance by the

prosecutor of any stipulated conditions in a provision which grant statutory

permission to pierce the corporate veil and to prosecute a corporate officer for an

offence committed by a company. One-person companies in Barbados must not

be treated as though there are mischievous stratagems but must be seen as critical

tools of small business and macroeconomic policy.

The Prest v Petrodel Argument

[106] In their written submissions to this Court, counsel for the appellant advanced an

elaborate argument that the appellant could not be prosecuted because the lifting

of the veil test, as it was recently considered and reformulated in the UK Supreme

Court case of Prest v Petrodel Resources Ltd, was not satisfied. In my view, s

50E(1) of Cap 319 and 22(2) and (3) of Cap 1 render this argument otiose.

Nevertheless, in light of counsel’s extensive submissions, I feel constrained to say

a few words on the Prest v Petrodel test.

[107] Prest v Petrodel concerned an application for ancillary relief in matrimonial

proceedings, in which the issue was whether the Court had the power to order the

transfer to the wife several properties which were legally owned by the three

respondent offshore companies, which were themselves solely owned and

controlled by the husband. The Supreme Court unanimously upheld the decision

of the Court of Appeal not to pierce the corporate veil and to treat the company’s

property as the husband’s property for the purposes of the statutory provisions

governing the distribution of assets on divorce.

Lord Sumption’s Evasion/Concealment Test

[108] Lord Sumption delivered the leading judgment on the issue of veil piercing. After

an exhaustive review of English case law, Lord Sumption purported to

reformulate the piercing the veil test. Two interconnected tenets of his

reformulation are especially important.

[109] The first is that veil piercing is a remedy limited to where there is no other

available traditionally accepted private law remedy (such as, for instance, in tort,

agency or trust). On this, Lord Sumption stated as follows:

“The principle is properly described as a limited one, because in almost

every case where the test is satisfied, the facts will in practice disclose a

legal relationship between the company and its controller which will make

it unnecessary to pierce the corporate veil. Like Munby J in Ben Hashem, I

consider that 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. I therefore disagree with the Court

of Appeal in VTB Capital who suggested otherwise...”

[110] The second is predicated on a distinction to be drawn between the two distinct

principles of “concealment” and “evasion”. Lord Sumpton rationalised this

distinction by theorising that the veil piercing by the court may be only justified

on the well-recognised principle of “fraud unravels everything” if a company’s

separate legal personality is being abused for the purpose of some relevant wrong

doing.53 The difficulty, he opined, was to identify what is relevant wrongdoing.

In this regard, he posited that “[r]eferences to a “façade” or “sham” beg too many

questions to provide a satisfactory answer”54and that “two distinct principles lie

behind these protean terms”55. According to him, these can conveniently be called

“the concealment principle” and “the evasion principle”56.

[111] The concealment principle is applicable where a corporate structure is interposed

so as to conceal the identity of the real actors. In such a case, and assuming their

identity is relevant, the court may look behind the veil to ascertain the facts which

the corporate structure is concealing without actually disregarding the corporate

structure altogether.

53 Prest (n12) [27]. 54 ibid [28]. 55 ibid. 56 ibid.

[112] The evasion principle is different. It applies if there is a legal right against the

person in control of the company which exists independently of the company’s

involvement, and a company is interposed so that the separate legal personality

of the company will defeat the right or frustrate its enforcement. In such a case,

the court may actually disregard the company’s separate legal personality by

piercing the corporate veil.

Opinions of the Other Supreme Court Justices

[113] Most of Lord Neuberger’s judgment was spent explaining his initially strong

attraction to the view that the veil-piercing doctrine should be given its quietus.

He expressed the view that the doctrine has never been applied in any case and

disagreed with Lord Sumption that it was applied in the cases cited by Lord

Sumption as examples of application of the doctrine. In the end, however, Lord

Neuberger affirmed Lord Sumption’s veil-piercing test in so far as it is based on

the well-established principle of “fraud unravels everything”.

[114] Lady Hale doubted the possibility of “neatly” classifying all cases in which courts

disregard separate legal personality into the two categories of concealment and

evasion. She opined that veil-piercing cases may simply be examples of the

exercise by courts of their “power to prevent the statutes under which limited

liability companies may be established as separate legal persons…being used as

an engine of fraud”57 with the object of not allowing companies to be used to

“take unconscionable advantage of the people with whom they do business.58

[115] Lord Mance59 and Lord Clarke60 expressed a similar doubt to Lady Hale. While

accepting that veil-piercing outside of Lord Sumptions evasion principle will be

rare and difficult to establish, they thought that it would be, in the words of Lord

Mance, “dangerous to seek to foreclose all possible future situations which may

arise”61 outside of that principle.

[116] Finally, Lord Walker did not endorse Lord Sumption’s veil-piercing evasion test.

His opinion was that veil-piercing is not a doctrine in the sense of a coherent

57 Prest (n 12) [89]. 58 ibid [92]. 59 Prest (n12) [100]-[103]. 60 ibid [103]. 61 ibid [100].

principle or rule of law. To him, it is simply a label “to describe the disparate

occasions on which some rule of law produces apparent exceptions to the

principle of separate of a body corporate”. Outside of these exceptions, there is

no residual category in which veil-piercing operates independently.

[117] Despite the considerable doubts of the other Justices of the UK Supreme Court,

counsel presented Lord Sumption’s concealment/evasion test as representing

settled law which should be accepted by this Court. For my part, I have serious

reservations on the correctness, as well as the practical usefulness, of that test and

so I do not agree that this Court should accept it. Of course, this is not the occasion

for interrogating that test. However, I wish to make a quick observation on it.

[118] The veil of incorporation is undoubtedly bestowed legislatively by the relevant

Companies Act. In Prest v Petrodel, Lord Neuberger regarded as self-evident that

the veil of incorporation may be pierced with “statutory authority”62. Indeed, it

seems to me that, consistent with its statutory basis, the corporate veil may only

be removed or pierced or lifted, (whichever expression be used), to the extent that

the Companies Act, or some other statute, provides for such removal or piercing

or lifting. Put simply, the corporate veil may only be lifted or pierced on statutory

authority.

[119] As seen in para [114] above, Lady Hale came very close to supporting this view

when she suggested that general veil piercing may be grounded in the rule of

statutory interpretation that a statute, the Companies Act, must not be allowed to

be used as an engine of fraud. As it appears to me, however, there may be an even

firmer basis for the view that general veil piercing emanates from the Companies

Acts and not, as asserted by Lord Sumption, from the “the well-recognised

principle that “fraud unravels everything”.

[120] Successive English Companies Acts have provided expressly that a company may

only be incorporated for a “lawful purpose”. Inspired by this, s 410 (1) (a) of Cap

308 is to the effect that a company cannot be formed for a purpose “contrary to

the law”. If a company cannot by these Acts be formed for an unlawful purpose

62 ibid [63].

or a purpose contrary to the law, then, it follows naturally that the Acts must be

interpreted as forbidding the use of a company for an unlawful purpose or a

purpose contrary to law. Where a company is sought to be so used, the courts are

entitled to pierce the corporate veil to prevent that unlawful purpose or purpose

contrary to law.

[121] As I have already said, this is not a proper case for this Court to pursue a close

analysis of the Prest v Petrodel evasion/concealment test. For my part, I wish only

to indicate that my view is that this Court should not adopt that test as argued by

counsel for the appellant without a searching examination of the principles that

underlie that test as well as to its practical utility.

Conclusion

[122] My conclusion on this appeal is that there is no doubt that the appellant, as a

director of Ouch Boutique, could have been prosecuted in his personal capacity

either as an accessory under s 50E(1) of Cap 319 or as a principal under s 22(2)

and (3) of Cap 1. However, both those provisions contain elements which must

be satisfied in pursuing such prosecution. The respondent did not satisfy either

the elements in s 50E(1) of Cap 319 or those in s 22(2) and (3) of Cap 1. For these

reasons I would allow the appeal.

Order of the Court

[123] The Court orders that the appeal is hereby dismissed.

/s/ J Wit _______________________________

The Hon Mr Justice J Wit

/s/ W Anderson /s/ M Rajnauth-Lee _____________________________ __________________________________ The Hon Mr Justice W Anderson The Hon Mme Justice M Rajnauth-Lee

/s/ D Barrow /s/ A Burgess

_____________________________ _____________________________

The Hon Mr Justice D Barrow The Hon Mr Justice A Burgess