Lee v. Lee Air farming Ltd (1961)

Facts:

Lee was holding 2999 shares out of 3000 shares and was sole governing director of the company. He was also appointed the chief pilot. He was also covered under the workmen’s compensation act. In the capacity of pilot he air crashed and died. His widow claimed compensation. Court of appeal in NZ rejected her appeal.

Issue:

1. Whether Lee and Lee Air farming Ltd were distinct entities legally?
2. Could they enter into contractual relationship of master and servant or Lee and the company were one and same person.

Observations:

PC relied on Saloman’s case and held that they were two different entities. The company had entered in to a contractual agreement with Lee to be a Chief Pilot. He died in the capacity of a worker of the company. The relationship was that of a servant and master.

Decisions:

The compensation was held to be paid to the widow. Thus the company and its sole governing directors were held to be two separate entities. Therefore there can be contractual relationship between the two.