Smith, Stone and Knight Ltd v Birmingham Corporation  4 All ER 116 (QB)
Smith, Stone and Knight Ltd (SSK) acquired a waste paper business. It incorporated a subsidiary to run this business, but SSK retained ownership of the business and the land upon which the business operated. This land was compulsorily purchased by Birmingham Corporation, who planned to compensate the subsidiary for the loss of the land and the disturbance to its business. However, SSK stated that it, not the subsidiary, was entitled to the compensation.The court held that, due to the level of domination that SSK had over the subsidiary (SSK owned the subsidiary’s business, the land upon which it conducted business and it owned 497 of the subsidiary’s 502 shares), the subsidiary was an agent of SSK. Accordingly, the subsidiary’s corporate personality was disregarded and SSK received the compensation.