Sidestepping Limited Liability in Corporate Groups Using the Tort of Interference with Contract

Melbourne University Law Review Association
Publication Type:
Journal Article
Melbourne University Law Review, 2006, 30 (1), pp. 62 - 87
Issue Date:
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This article examines the tort of interference with contract. In particular it analyses the application of the tort to a holding company that 'starves "its subsidiary of funds. In this context the tort provides a potential mechanism to 'sidestep' the principle of limited liability. The elements of the tort are highly malleable and the tort is prone to expansion. Such expansion could erode the benefits of limited liability. For this reason the application of the tort in this context should be constrained with reference to the justifications of limited liability and courts should be reluctant to allow its application by a voluntary creditor who had other available mechanisms to protect their interests
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