Jackie Wells, head of our family law team, comments on the issues and impact of this landmark Supreme Court decision. Petrodel Resources Ltd & Ors v Prest & Ors [2012] EWCA Civ 1395. Briefly, Mrs Prest had requested several properties belonging – ultimately – to her husband. The judgment today gives us some much-needed clarity on what can and cannot be included when drawing up a financial settlement.”, The Supreme Court’s judgment can be read here: http://www.supremecourt.gov.uk/decided-cases/docs/UKSC_2013_0004_Judgment.pdf. And of course, BLP had a significant victory in the Supreme Court in May, in the Eurosail judgment, which provided clarification on the test for insolvency. 45-- 6 7 I 99 4556 New Judgment: Prest v Petrodel Resources Ltd & Ors [2013] UKSC 34. Sorry, preview is currently unavailable. You can download the paper by clicking the button above. The ratepayers appealed on the “piercing the veil” aspect of the ruling. The case concerned a very high value divorce. It was of key interest as it was a legal cross over between family law and company law. [2016] 1(1) HHS ILSA Law Journal, SHIP ARREST IN NIGERIA: PIERCING THE TOGA OF LEGAL PERSONALITY OF SHIPPING COMPANIES IN ENFORCING MARITIME CLAIMS. Whilst Mrs Prest lost on many of her points of appeal, the Supreme Court looked at the overall asset structure … BACKGROUND TO THE APPEAL The value of the judgement was not in question, as the courts had already ruled the husband – a Nigerian oil tycoon – would have to pay his wife £17.5m, largely due to his conduct during the case, and he was not arguing over this. The Appeal. Justices. The Court has now come down firmly and unanimously in favour of the wife, albeit only on the facts of this particular case, rather than as a general principle to be used whenever assets were owned by a company rather than an individual (as suggested by the judge in the first trial). Wendy Hopkins Family Law Practice is a trading name of Wendy Hopkins Family Law Practice Limited, a Limited Company authorised and regulated by the Solicitors Regulation Authority, http://www.supremecourt.gov.uk/decided-cases/docs/UKSC_2013_0004_Judgment.pdf. Bailii, Bailii Summary, SC Summary, SC Matrimonial Causes Act 1973 23 England and Wales Citing: Appeal from – Petrodel Resources Ltd and Others v Prest and Others CA 26-Oct-2012 The parties had disputed ancillary relief on their divorce. The Facts. The divorcing couple, Mr and Mrs Prest, were wealthy. “The only basis on which the companies could be ordered to convey properties to the wife is that they belong beneficially to the husband, by virtue of the particular circumstances in which the properties came to be vested in them,” read a statement from the Court. Both sides of the profession were affected differently. A short summary of this paper. Piercing The Corporate Veil: Prest Vs Petrodel Resources The Supreme Court has handed down a landmark judgement in favour of Mrs Prest in high profile matrimonial dispute. Prest v Petrodel Resources Ltd – What will be the impact of the Supreme Court decision today? The relatively short judgment in the United Kingdom Supreme Court case of Prest v Petrodel Resources Ltd1 (herein, Prest) has garnered vociferous interest from academics and practitioners. Many of the assets (primarily properties in London) were held by overseas companies controlled by the husband. It was established, inter alia, that Mr Prest was the This is supported by the recent Supreme Court decision in Prest v Petrodel Resources Ltd, where a divorced wife claimed shares in houses owned by companies in which her ex-husband was the controlling shareholder. He held this was a developing area of law and that the Supreme Court’s ruling on “piercing the corporate veil” in Prest v Petrodel Resources Ltd [2013] UKSC 34 still left further questions open which may be relevant in this case. Prest v Petrodel Resources Ltd emphasises the importance of properly and transparently running companies. Appeal by husband against judgment summons under section 5 of the Debtors Act 1869, granted in respect of non-payment of maintenance arrears. Giving judgment, Lord Sumption said the case meant the recognition that there was “a small residual category of cases where the abuse of the corporate veil to evade or frustrate the law can be addressed only by disregarding the legal personality of the company is consistent with authority and long-standing principles of legal policy.”. The three companies, each in the substantial ownership of the husband, … The law in this area has been rife with conflicting principles and many commentators felt that the Supreme Court decision in Prest v Petrodel provided a unique opportunity 3 to resolve the “never ending story” 4 of when the corporate veil can be pierced. Limited Liability and the Extension to the Corporate Group, M. Balharova Piercing Corporate Veil in U.S. and UK: Are we witnessing the downfall of the doctrine? The Supreme Court's ruling in the landmark divorce case, Prest v Petrodel Resources Ltd [2013] UKSC 34, confirmed that placing assets into corporate structures for wealth protection reasons might not now protect that wealth against divorce claimants. He failed to comply with the court orders requiring for full and frank disclosure of his financial position, and the companies also failed to file a defence or at least to comply with orders for disclosure. “A large number of high-profile lawyers had wondered which way the Supreme Court would go on this, as a decision either way could have had a huge impact on current and future cases,” said Lorraine. UKSC 2013/0004. JUSTICES: Lord Neuberger (President), Lord Walker, Lady Hale, Lord Mance, Lord Clarke, Lord Wilson, Lord Sumption . Mr and Mrs Prest (who had dual British and Nigerian citizenship) had their matrimonial home in London but it was determined by the court that Mr Prest was based in Monaco. Mr. Prest was the sole owner of numerous offshore companies. Prest v Petrodel – a new court approach to corporate structures Background Prest v Petrodel was a “big money” divorce case, concerning assets worth in excess of £17.5million. The Court was careful not to imply that this could be done in every case, but rather only in “very limited circumstances” where the ‘ownership’ of assets by a company was simply a convoluted way of holding them on trust for the real owner. The decision in Prest v Petrodel is an important and helpful one as it makes some attempt to identify the principle underpinning the jurisdiction and to clarify the situations in which it will be possible to pierce the corporate veil and to limit … 12 Jun 2013. 17 Full PDFs related to this paper. “If the wife’s appeal was rejected, it would be a major departure from the existing approach,” said Lorraine. Facts The parties, who had four teenage children, separated in 2008 after 15 years of marriage. With these two judgments the Supreme Court have Wife claimed that the properties held by the companies belonged beneficially to the husband. Mrs Prest then appealed to the Supreme Court, the highest court in the land, to overturn that decision. 12 Wednesday Jun 2013 References: [2012] EWCA Civ 1395, [2013] 2 FLR 576, [2013] 2 WLR 557, [2013] 1 All ER 795, [2012] 3 FCR 588, [2013] 2 Costs LO 249, [2012] WLR(D) 296, [2013] Fam Law 150 Links: Bailii Coram: Thorpe, Rimer, Patten LJJ Ratio: The parties had disputed ancillary relief on their divorce. clauses (Mauritius v Hestia) and some welcome guidance on the challenging principle of piercing the corporate veil (Prest v Petrodel). Prest v Petrodel Resources Ltd [2013] UKSC 34; [2013] 2 AC 415; [2013] 3 WLR 1 This case summary discusses the UK Supreme Court case of Prest v Petrodel Resources Ltd [2013] UKSC 34; [2013] 2 AC 415; [2013] 3 WLR 1 in which the majority held that the corporate veil should only be pierced where all other Lorraine Watts, Associate at Wendy Hopkins Family Law Practice, says the case was being watched with interest. The Court of Appeal (Criminal Division) has applied the principles in Prest in a case concerning a criminal … Enjoy this new, redesigned issue of Summary Judgment, short, after Mr and Mrs Prest divorced, Moylan J. awarded Mrs Prest a sum of £17.5 million as a fair division of Mr Prest’s assets. Lord Neuberger, Lord Walker, Lady Hale, Lord Mance, Lord Clarke, Lord Wilson, Lord Sumption. The relatively short and significant judgment in the Supreme Court case of Prest v Petrodel Resources Ltd has gathered vociferous interest from academics and practitioners. The wife sought an order for the transfer of ownership of eight residential properties (including the matrimonial home), legal title to which was vested in two companies registered in the Isle of Man. Based in Cardiff, the award-winning firm is top rated for family law in Wales by independent research. The Supreme Court case Prest v Petrodel Resources Ltd [2013] 2 AC 415 addresses the issue of whether, and if so in what way, the court is competent to … Appeal dismissed. Prest v Petrodel case In a ruling handed down yesterday, the Supreme Court upheld the decision made by the original High Court trial judge in the case of Prest ordering Mr Michael Prest, a wealthy oil tycoon and founder of Petrodel Resources, to transfer properties legally owned and held in Prest v Petrodel Resources Ltd & Ors [2013] UKSC 34 (12 June 2013) March 22, 2018/in Company /Private Law Tutor. Academia.edu no longer supports Internet Explorer. In 2011, Moylan J gave judgment in the case of Prest. The value of the judgement was not in question, as the courts had already ruled the husband – a Nigerian oil tycoon – would have to pay his wife £17.5m, largely due to his conduct during the case, and he was not arguing over this. ©Copyright 2021. Enter the email address you signed up with and we'll email you a reset link. This case summary discusses the UK Supreme Court case of Prest v Petrodel Resources Ltd [2013] UKSC 34; [2013] 2 AC 415; [2013] 3 WLR 1 in which the majority held that the corporate veil should only be pierced where all other remedies were not available. “We always include company assets in divorce situations, so the point of this case was not whether the amount of the award to the wife would stand, but rather whether the courts had the power to order those physical company assets to be signed over to make sure she actually gets her hands on the money she is awarded.”. (12 June) 12 Jun 2013. Prest v Petrodel Resources Ltd UKSC 34, 2 AC 415 is a leading UK company law decision of the UK Supreme Court concerning the nature of the doctrine of piercing the corporate veil, resulting trusts and equitable proprietary remedies in the context of English family law. The Supreme Court has just handed down its judgment in the landmark case of Prest v. Petrodel. Appeal by a number of companies concerning the court’s jurisdiction in financial remedy proceedings to order one party to transfer or cause to be transferred to the other, properties owned by the companies. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to upgrade your browser. Judgment details. PRESS SUMMARY Prest (Appellant) v Petrodel Resources Limited & Others (Respondents) [2013] UKSC 34 . Posted by Alison Cartin on 23/06/2013. The Prest v Petrodel decision followed another Supreme Court judgment where the issue was considered at length, VTB Capital plc v Nutritek International Corp and others [2013] UKSC 5, although the VTB case was decided on another ground so carries less legal weight. The implications of Prest v Petrodel Resources Limited' (News and Publications, 2013) accessed 20 th December 2015 25 Ibid 26 [1939] 4 All ER (Ch) 27 Shepherd N, 'Petrodel v Prest: cheat's charter or legal consistency?' On appeal from: [2012] EWCA Civ 1395 . When the parties first went to court, the judge found in the wife’s favour, stating the court had the power to “pierce the corporate veil” and award the properties to her. Facts. The husband appealed to the Court of Appeal, whcih surprisingly overtuned that initial decision, instead agreeing with the husband that he did not “own” the properties and therefore could not be ordered to transfer them to his wife. In Prest v Petrodel Resources Limited the Supreme Court considered the basis on which the corporate veil might be pierced (see post).The comments were strictly speaking obiter and were made in the context of a case concerning transfer of properties following a divorce. Another was to take funds from the companies whenever he wished, without right or company authority. Prest v Prest [2015] EWCA Civ 714. The Supreme Court has just handed down its judgment in the landmark case of Prest v. Petrodel. This article will critically evaluate the significance of the Prest v Petrodel Resources Ltd[1] decision in light of the corporate veil doctrine. Case ID. Wendy Hopkins Family Law Practice is Wales’ first and largest law firm dedicated solely to family law. Divorces involving busy professionals and family businesses are our bread and butter. She asked the court to lift the corporate veil and treat her ex-husband and the companies as being effectively the same. This essay will argue the decision has done little to fault the Salomon principle. In part satisfaction of this sum, the judge ordered three Petrodel group companies to transfer the seven properties in question to Mrs Prest. He had argued that since he did not technically own the properties himself, as they were actually owned on paper by companies he had set up, the courts had no power to grant them to his wife: in effect, the properties were not his to give away whether he wanted to or not. What was in dispute, and what led to this becoming a significant case, was how the wife would actually physically receive the settlement. The background to Prest v Petrodel concerned ancillary relief proceedings before the English courts following a divorce. The case concerned a very high value divorce. “At Wendy Hopkins Family Law Practice, we have been monitoring developments in this case, and advising our clients as to what the result might mean for them. She said the outcome had been in some doubt, but that the judgment reflected an extension and confirmation of existing guidelines, rather than a new concept in family law. Judgment (PDF) Press summary (PDF) Judgment … The relatively short and significant judgment in the Supreme Court case of Prest v Petrodel Resources Ltd has gathered vociferous interest from academics and practitioners.It was of key interest as it was a legal cross over between family law and company law. Prest (Appellant) v Petrodel Resources Limited and others (Respondents) Judgment date. Neutral citation number [2013] UKSC 34. Prest v Petrodel Resources Ltd: companies held properties on trust for husband. In some instances the properties had been The case of Prest v Petrodel has been long awaited because of its potential to re-shape the law in relation to the piercing of the corporate veil. Prest v Petrodel Resources Ltd 45- '6:; ') Salomon v A Salomon & Co Ltd 4 8>96 ( 55 T rustor AB v Smallbone 45-- 6 5 )'? Prest was of particular interest because of the legal cross-over between family law and corporate law. 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