the case where a company itself trades in a foreign country and the case where it trades in a foreign country through a subsidiary, whose activities it has full power to control, may seem a slender one….’ He approved Sir Godfray’s argument ‘save in cases which turn on the wording of particular statutes or contracts, the court is not free to disregard the principle of Salomon… merely because it considers that justice so requires.’ On the test of the ‘mere façade’, it was emphasised that the motive was relevant whenever such a sham or cloak is alleged, as in Jones v Lipman. A company must be set up to avoid existing obligations, not future and hypothetical obligations not yet arisen. The court held that one of Cape's subsidiaries (a special purpose vehicle incorporated in Liechtenstein) was in fact a façade, but on the facts, it was not a material subsidiary such as to attribute liability to Cape. Cases like Holdsworth, Scottish Coop and DHN were distinguishable on the basis of particular words on the relevant statutory provisions. It noted that DHN was doubted in Woolfson. The court separately had to consider whether Cape had established a presence within the United States, such that the English court should recognise the jurisdiction of the United States over Cape, and enforce a US judgment against it (one of the criticisms made of the decision by US lawyers is that the Court of Appeal fundamentally misunderstood the nature of the federal system in the US, but that misunderstanding does not affect the general principles laid down by the court). The Court of Appeal held that for a company to have a presence in the foreign jurisdiction, both of the following must be established: the company has its own fixed place of business (e.g. a branch office) in the jurisdiction from which it has carried on its own business for more than a minimal time. the company's business is transacted from that fixed place of business. On the facts, the Court of Appeal held that Cape had no fixed place of business in the US such that recognition should not be given to the US judgment awarded against it. Significance After the decision (which has been followed), English law has suggested a court cannot lift the corporate veil except when construing a statute, contract or other document; if a company is a "mere façade" concealing