Jones v Lipman [1962] 1 WLR 832

Court: High Court (Russell J)

Facts: Lipman sought to evade a contract to sell land by transferring the land to a newly created company. Jones, the buyer, sued both Lipman and the company for specific performance, arguing that the transfer was a sham.

Issue: Can the corporate veil be pierced to enforce a contract when a company is used to avoid fulfilling contractual obligations?

Held: The High Court ordered specific performance against both Lipman and the company, finding that the company was a "device" and "sham" created to evade contractual obligations.

Key Judicial Statement: Russell J described the company as a "mask" used by Lipman to avoid legal accountability, justifying the piercing of the corporate veil.

💡 Leveluplaw: The court may pierce the corporate veil to enforce contractual obligations when a company is used to disguise attempts to evade a contract.