Question

New Nirvana Ltd is a company controlled by the members of the hard rock band, N/N. A number of wholly owned subsidiaries of New Nirvana Ltd are involved in setting up and running the band’s concerts. One of the subsidiary companies, Nuclear Blast Sounds Pty Ltd, is responsible for setting up the sound equipment at N/N concerts in Australia. At a recent N/N concert in Sydney, Nuclear Blast Sounds Pty Ltd negligently set the sound levels too 2 high with the result that five audience members suffered permanent hearing loss. Unfortunately for those audience members, Nuclear Blast Sounds Pty Ltd had no negligence insurance and cannot pay the likely damages claims. Advise the injured audience members whether they can make New Nirvana Ltd liable for Nuclear Blast Sounds Pty Ltd’s negligence.

Answer 1

Facts of the Case: Nuclear Blast Sounds Pty Ltd which is a wholly owned subsidiary of New Nirvana Ltd negligently set the sound levels too high with the result that five audience members suffered permanent hearing loss.

Case Law Reference:The Case of Chandler vs Cape plc has established that a parent enterprise may be held liable for breaches of health and safety laws by a subsidiary Enterprise.

Explanation: In the given case, Nuclear Blast Sounds Pty Ltd is a wholly owned subsidiary of New Nirvana Ltd.It naturally acts on the directions of holding company. Since the permanent hearing loss caused to the audience is due to ngligence of Nuclear Blast Sounds Pty Ltd the audience has full rights to sue New Nirvana Ltd if in case the subsidiary is unable to honour their claims.

New Nirvana Ltd has no right to use Corporate Veil in this case as the subsidiary is a wholly owned subsidiary and it acts on direction of New Nirvana Ltd.

Conclusion: Injured audience members can make New Nirvana Ltd liable for Nuclear Blast Sounds Pty Ltd’s negligence.