Lee v Lee’s Air Farming Ltd [1961] AC 12

Court: Privy Council

Facts: Mr. Lee, the sole director and shareholder of Lee’s Air Farming Ltd, died in an accident while working. His widow sought compensation under the Workers’ Compensation Act, arguing that Mr. Lee was an employee of the company.

Issue: Can a person be both a director and shareholder of a company and also be considered an employee of that company for compensation purposes?

Held: The Privy Council held that Mr. Lee could be an employee of the company despite being its sole director and shareholder. The company and Mr. Lee were recognized as separate legal entities.

Key Judicial Statement: Lord Morris remarked that "the company and the deceased were two separate and distinct legal persons," affirming that a company can contract with its own directors and shareholders.

💡Leveluplaw: A person can be both a director and an employee of a company, reflecting the separate legal status of the company and its members.