Lee v. Lee’s Air Farming Ltd. (1961): Director as Employee | Company Law Case
Introduction Lee v. Lee’s Air Farming Ltd. (1961) is a landmark case in Company Law that further strengthened the principle of separate legal entity laid down in Salomon v. Salomon & Co. Ltd. (1897) . This case answered an important question: Can the same person be the owner, director, and employee of a company? The answer given by the Privy Council was a clear YES . Background of the Case Mr. Lee was a businessman in New Zealand who started an aerial farming business involving crop dusting through aircraft. He formed a company named Lee’s Air Farming Ltd. The structure of the company was as follows: Mr. Lee held almost all the shares of the company He was the governing director He was also employed as a pilot He received salary for his work as a pilot Thus, Mr. Lee was simultaneously a shareholder, director, and employee of the company. Facts of the Case While performing his duties as a pilot for the company, Mr. Lee met with a fatal accident...