Whilst Mrs Prest lost on many of her points of appeal, the Supreme Court looked at the overall asset structure of her … Prest v Petrodel Facts Claim by Mrs. Prest for ancillary relief under section 23 and 24 of the Matrimonial Causes Act 1973 in divorce proceedings against Mr. Prest. Judgment details. 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 [1897] AC 22 and reiterated in more recent authorities such as Adams v Cape Industries [1990] Ch 433 . 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. She asked the court to lift the corporate veil and treat her ex-husband and the companies as being effectively the same. "Lexology is a high quality service; the articles are very relevant and always useful", © Copyright 2006 - 2021 Law Business Research. In Prest v Petrodel [2013] UKSC 34 the English Supreme Court undertook a review of the principles of English law which determine in what circumstances, if any, a court may set aside the separate legal personality of a company from its members and attribute to its members the legal consequences of the company’s acts. 0000003863 00000 n The Supreme Court has just handed down its judgment in the landmark case of Prest v. Petrodel. That process is often referred to as "piercing the corporate veil". Since Salomon v Salomon, 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. INTRODUCTION Rogers AJA in a New South Wales case commented "there is no common, underlying principle, which underlies the occasional decision of the courts to pierce the corporate veil". Introducing PRO ComplianceThe essential resource for in-house professionals. Understand your clients’ strategies and the most pressing issues they are facing. Furthermore, the existence of the resulting trusts meant that it was unnecessary to pierce the veil. H�\��n�0�}���vQ��߿�!Q�J,�a� 1L�!�BX������A���!q�ݽ��n6��ih�a6��o�pnS�1��>++�vͼ��gs9�YO�߯s���Ӑյ�ĝ�y���M;�c���0u��M����p �l �It����V �F�dhԿ>�H������3]�2*L���T�����O�O���U�:q8����-1�"2��y ��k�k"YJ����l!���s4��qa����l�Ta�_ v&�� endstream endobj 46 0 obj <> endobj 47 0 obj <> endobj 48 0 obj <> endobj 49 0 obj <>stream The case provides a framework for an examination of a number of issues relating to the veil-piercing rule. It is also a vital component of many frauds and a shield for the proceeds of fraud. �)���w ƅ��d�P��ļb�J(��+dPk�o�#���@��ߒ�`t���]��V�3�}�R������)�^y���ѷ�$�������:x��p{�W�0"��9�z�masܿ�h�j.��\�b��k�_�V�N]��'�4�U^?��ϧ���e����h1��20~�����"�6e�A5�W� The Supreme Court unanimously agreed that the companies should be ordered to transfer the properties but that the First Instance Judge had reached his decision in the wrong way: the Court could only order transfer of assets actually owned by the husband. The unanimous decision that the Matrimonial Causes Act does not create a mechanism for treating assets which do not belong to a party to the marriage as if they did will be of the utmost importance to practitioners of family law but will have little wider interest. Mr Prest owned a network of offshore companies over which he exercised total management control. 0000009042 00000 n Prest and piercing the veil: Prest v Petrodel Resources Ltd 2013 – When a couple divorces, either spouse can make a claim for ancillary relief. Central to Prest was the extent to which property held by a company controlled by a party However, the case has received most attention as a result of its treatment of “piercing the corporate veil”. 0000001603 00000 n 0000002147 00000 n Mr Prest had set up his companies long before his marriage broke down and long before any question of separate financial provision for his wife was considered. John Wilson QC of 1 Hare Court analyses the Supreme Court’s judgment in the landmark case of Prest v Petrodel and considers its implications for family lawyers. Judgment (PDF) Press summary (PDF) Judgment on BAILII (HTML version) 0000010642 00000 n This has overshadowed the Court’s decision to recognise a resulting trust, which achieved the same result as if the Court had pierced the corporate veil. The "evasion principle" was formulated by Lord Sumption, but even he recognised that "in almost every case where [it] is satisfied, the facts will in practice… make it unnecessary to pierce the corporate veil". The judgment of the Supreme Court in Prest v Petrodel Resources Ltd [2013] UKSC 34 was eagerly anticipated by family and corporate lawyers alike. �eD�F�XR�T����-���z�s���uܞ&�N�6&�HG�j~;�L���� �U��� In Prest v Petrodel the husband was a wealthy oil trader who had built up a portfolio of properties; all of which were in the names of various companies. In Prest v Petrodel Resources Ltd [2013] UKSC 34, the UK Supreme Court has recently reviewed the English law in this area, concluding that the … 0000112121 00000 n 0000005226 00000 n The case concerned a very high value divorce. This article examines the judicial approach to the corporate veil post-Prest v Petrodel Resources Ltd. To view all formatting for this article (eg, tables, footnotes), please access the original, Mesothelioma - Fairchild principles of proof apply only to the need to prove causation, A U.S. employer’s guide to basic UK employment and immigration laws, Using evidence obtained in criminal proceedings in a civil claim to recover the proceeds of corruption: a guidance note, Bank guarantees: "primary obligor" wording does not create a demand bond, Piercing the corporate veil: Supreme Court clarifies the English law position, The corporate veil: Prest, but not pierced, The corporate veil: prest, but not pierced, Ground breaking Supreme Court decision in Prest v Petrodel: offshore impact. 0000003365 00000 n 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. Many of the assets (primarily properties in London) were held by overseas companies controlled by the husband. 5 ibid [27], [89], [99]. �6#쾪v�]��� ���d����nB�Qvh�������Y�"��F� �� `�5-���� ���gP bm��$��1�L]\:��7������X���x�����:���A�����Aj���\5,F?�pg�00����@&En �Ȁ�@�P�D��3���=P>���l���g4ޘ�� bbL�J�0 l�8} endstream endobj 34 0 obj <>>>/Lang(en-GB)/Metadata 31 0 R/OpenAction 35 0 R/Outlines 26 0 R/PageLayout/SinglePage/Pages 30 0 R/Type/Catalog/ViewerPreferences<>>> endobj 35 0 obj <> endobj 36 0 obj <> endobj 37 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]/XObject<>>>/Rotate 0/Tabs/W/Thumb 28 0 R/TrimBox[0.0 0.0 595.276 841.89]/Type/Page>> endobj 38 0 obj [39 0 R] endobj 39 0 obj <>/Border[0 0 0]/H/N/Rect[496.559 38.3365 561.26 25.8804]/Subtype/Link/Type/Annot>> endobj 40 0 obj <> endobj 41 0 obj <> endobj 42 0 obj <> endobj 43 0 obj [/ICCBased 60 0 R] endobj 44 0 obj <> endobj 45 0 obj <>stream The decision in Prest v Petrodel is not entirely unexpected. 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