The Judicial Committee of the Privy Council reasserted that a company is a separate legal entity, so that a director could still be under a contract of employment with the company he solely owned.

Mr Lee held 2999 of 3000 shares, was the sole director and employed as the chief pilot.

Mrs Lee wished to claim damages of 2,430 pounds under the Workers' Compensation Act 1922 for the death of her husband, and he needed to be a 'worker', or 'any person who has entered into or works under a contract of service... with an employer... whether remunerated by wages, salary or otherwise.'

The Court of Appeal of New Zealand said Lee could not be a worker when he was in effect also the employer.

There would exist no power of control and therefore the relationship of master-servant was not created."