Abstract:
This article examines the scope of the principle in Smith, Stone and Knight
that the corporate veil may be lifted on the basis of an implied agency
between group companies. It argues that, on a proper assessment of the
weight of judicial authority in Australia, the six criteria used in Smith, Stone
and Knight to determine the existence of an implied agency should not be
similarly applied outside of fact scenarios identical to Smith, Stone and
Knight. In contrast, it is argued that a more principled use of Smith, Stone
and Knight is to use the six criteria to justify lifting the corporate veil on the
basis of avoiding a legal obligation or the existence of a sham. To
demonstrate the difficulties associated with applying the six criteria in Smith,
Stone and Knight as a general test for identifying an implied agency
relationship this article will discuss recent developments in industrial law
where Smith, Stone and Knight has been used to lift the corporate veil
between related corporate employers.
