CATHERINE LEE V LEE’S AIR FARMING LIMITED

FACTS OF THE CASE

In 1954 the appellant’s husband Lee formed the company named LEE’S AIR FARMING LTD.
for the purpose of carrying on the business of aerial top-dressing with 3000 thousand share of
1euro each forming share capital of the company and out of which 2999 shares were owned by
Lee himself. Lee was also the director of the company. He exercised unrestricted power to
control the affairs of the company and made all the decision relating to contracts of the company.
Company entered into various contract with insurance agencies for insurance of its employees
and few premiums of the policies were paid through companies bank account for the personal
policies taken by Lee in its own name but it was debited in the account of lee in companies book.
Lee apart from being the director of the company was also a pilot. In March, 1956, Lee was
killed while piloting the aircraft during the course of aerial top-dressing. Lee’s wife who is
appellant claimed worker compensation under New Zealand Workers’ Compensation Act, 1922
as she claimed that Lee during work as employee of the company. The New Zealand Court of
Appeal declined the claim of appellant as it refused to hold that Lee was a worker, holding that a
man could not in effect, employ himself.

ISSUE RAISED BY RESPONDENT

Respondent company claimed that Lee was owner of the company and had maximum number of
shares in the company so his wife is not entitled for workmen compensation as he was not the
employee of the company. Respondent claimed that Mr. Lee couldn’t  be the owner of the
company as there is no master-servant relation that exist between him and the company.

Required:
Whether the principle of Separate Entity applicable or not?
Whether Mrs. Lee (appellant) liable to claim compensation under the Worker’s
Compensation Act, 1922?
Analyze the case on the basis of the reference case of Salmon Vs Salmon and write
the possible advice/judgment of the court under the provisions of Company Act
2017. Also explain the laws/concept which are the basis of the judgement of this
case.