Judgment details. However, the Supreme Court found that based on the facts, it was possible to infer a resulting trust in favour of the husband as he had provided all the funds for the companies to purchase the properties and made orders in favour of the wife. The background to these proceedings is extensive and, indeed, is well known to those who practise family law, in consequence of an earlier sequence of appeals which brought the case before the Supreme Court (Prest v Petrodel Resources Ltd. [2013] UKSC 34; [2013] 2 AC 415). In the light of this finding, Mr Prest had not used the corporate structures for wrongdoing. Prest (Appellant) v Petrodel Resources Limited and others (Respondents) Judgment date. It is important to bear in mind the principles in Prest when considering the complexities of offshore corporate investments in divorce settlements. Case ID. piercing the corporate veil: the position following petrodel v prest As well as cases of fraud and other wrongdoing in the course of business, the other area in which the courts have most frequently been asked to be creative in their approach to companies has been in the family division of the High Court in divorce cases. Introduction. Here, the husband alleged that he had no beneficial interest in the legal title to shares held in the companies, which, again, held assets which were located onshore but held in offshore companies. Divorce cases are not a special case in which the court may depart from the doctrine of the corporate veil. introduction The recent decision of the Supreme Court in Prest v Petrodel Resources Ltd 1 has clarified and restricted the circumstances in which the corporate veil between those dealing with companies and those operating them can be pierced so that the latter can made liable to the former instead of liability stopping with the company itself. VTB Capital plc v Nutritek International Corp [2013] UKSC 5, [2013] 2 AC 337 is an English company law case, concerning piercing the corporate veil for fraud.. The Supreme Court has handed down a landmark judgement in favour of Mrs Prest in high profile matrimonial dispute. On 12 June 2013, the court unanimously overturned the decision of the Court of Appeal and ruled against a wealthy oil tycoon, Michael Prest, ordering that seven properties vested in Petrodel Resources Ltd be … UKSC 2013/0004. Prest (Appellant) v Petrodel Resources Limited & Others (Respondents) [2013] UKSC 34 . Published by Adam Forster, Senior Associate. 12 Jun 2013. In CWG v MH, some of the offshore provision was made prior to the handover of Hong Kong as asset protection in 1997. In cases where the ostensible title to company assets is established, the Supreme Court has demonstrated that an attempt to deceive the court could result in inferences being drawn which may precipitate the transfer of those assets, even where the corporate veil remains firmly in place. introduction The recent decision of the Supreme Court in Prest v Petrodel Resources Ltd 1 has clarified and restricted the circumstances in which the corporate veil between those dealing with companies and those operating them can be pierced so that the latter can made liable to the former instead of liability stopping with the company itself. Since Salomon v Salomon, 1 it has been well established in UK law that a company has a separate personality to that of its members, and that such members cannot be liable for the debts of a company beyond their initial financial contribution to it. The corporate veil is a metaphorical phrase, established in the landmark case of Salomon v Salomon & Co Ltd 6 . The Court of Appeal held that the family court should not allow the properties to be taken into account in the division of assets because the companies were the beneficial owners of the properties and upheld the company law principle that there is nothing special about family law and the courts cannot pierce the corporate veil. The issue of beneficial ownership often comes before the courts in Hong Kong for cases where assets are held on behalf of other family members or through corporate or trust structures. The same point applies to Jones v Lipman, para 135. 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. through concealment”.39Taking Gencorand Trustor(the supposed. Para. Their main argument was that the family court could not simply depart from long established company law principles relating to the separate legal personality of companies. Appeal by husband against judgment summons under section 5 of the Debtors Act 1869, granted in respect of non-payment of maintenance arrears. Many of the assets (primarily properties in London) were held by overseas companies controlled by the husband. The set of circumstances in which the ‘lifting‘ process in respect of shareholder liability may be triggered is set out in the test from the Supreme Court case of Prest v Petrodel Resources Ltd [2013] UKSC 34. This is the doctrine that a company is a separate and independent legal person, which is distinct in law from its members. Another was to take funds from the companies whenever he wished, without right or company authority. As with Prest, the court looked specifically at whether the husband had been able to use, had control over, and had an interest in the Hong Kong companies, the shares of which were placed offshore, pre allotment and post allotment. Judgment (PDF) Press summary (PDF) Judgment on BAILII … The court was plainly convinced that Mr Prest was likely to attempt to avoid making payment to Mrs Prest and ordered that seven UK properties nominally owned by the "Petrodel group" be transferred to Mrs Prest. Indeed, the court found that Mr Prest took steps to conceal details of his wealth from the court and demonstrated flagrant disregard for court orders to provide corroborative information of his personal and commercial interests. UKSC 2013/0004. Philippa is a professional support lawyer in the divorce and family. In some instances the properties had been Google Scholar For us it's a must, not a maxim. In this case, the husband had effectively purchased a number of properties in England which he had put into the names of offshore companies. 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 pierce the corporate veil save any specific statutory authority to do so. It was established, inter alia, that Mr Prest was the Professional Support Lawyer, Withers Khattarwong. Prest was of particular interest because of the legal cross-over between family law and corporate law. The article seeks to determine whether the Supreme Court clarified the rule in the case and concludes from an examination of the literature that the court clarified some but not all issues relating to the rule. Facts The parties, who had four teenage children, separated in 2008 after 15 years of marriage. 750 RPC people united by a passion for client service. Another was to take funds from the companies whenever he wished, without right or company authority. In this case, the husband had effectively purchased a number of properties in England which he had put into the names Prest (Appellant) v Petrodel Resources Limited & Others (Respondents) [2013] UKSC 34 . This case can also been seen as a reminder that the court can take into account a party’s access to wealth and assets whether acquired through gifts if enjoyed habitually as an established way of life. Lloyd’s Maritime and Commercial Law Quarterly 2014(2): 269 – 296 . Many of the assets (primarily properties in London) were held by overseas companies controlled by the husband. company law after Prest v Petrodel decision Ariel Mucha The Supreme Court case Prest v Petrodel Resources Ltd [2013] 2 AC 415 addresses the issue of … The Supreme Court has recently given judgment in the case Prest (Appellant) v Petrodel Resources Limited and others (Respondents), following an appeal from the Court of Appeal. In SLA, the couple were married for 17 years. In reaching its conclusion, the Supreme Court confirmed that the Court of Appeal's analysis of the circumstances in which the corporate veil may be pierced was correct. Neutral citation number [2013] UKSC 34. The position appeared reasonably clear but after that, however, came the much publicised matrimonial case of Prest v Petrodel and, more recently, the competition case of Akzo Nobel v The Competition Commission. But in Prest this was achieved via a different route. Claim by Mrs. Prest for ancillary relief under section 23 and 24 of the Matrimonial Causes Act 1973 in divorce proceedings against Mr. Prest. 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 … Although the case revolved around a dispute concerning financial provision on divorce, the decision has potentially wider implications. This article will critically evaluate the significance of the Prest v Petrodel Resources Ltd[1] decision in light of the corporate veil doctrine. Mr Prest was a wealthy businessman operating in the oil sector. Piercing the corporate veil: a new era post Prest v Petrodel That a company has a separate legal personality from its shareholders is a well-established common law rule, derived initially from the case of Salomon v A Salomon AC 22 and reiterated in more recent authorities such as Adams v Cape Industries Ch 433. 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