0000008453 00000 n 0000003715 00000 n Facts: Mr Prest was an oil-trader. H��SMo�0��W�1>l��|��*�hZ,N���j�)d7$�@���w�U��0�g�ޛ7�A(-%X`�����= &�2x2�bƺ%/�T��6-�x��e�C�%*�%�Ln۸��$��(%�����ۼ&���Pp�3R�_CM0����@�%�b2�>�j��`P��#� Prest and piercing the veil: Prest v Petrodel Resources Ltd 2013 – When a couple divorces, either spouse can make a claim for ancillary relief. Introduction. 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. 0000003750 00000 n 0000004220 00000 n 0000001645 00000 n 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. �u̯1���^a��?�0��cU�yb~f~F^1�c^�_���[d~_b���!�-�iqM[2��s�l�-�0�7X�쐕n�=2�NK���n�7�4[���G�x��G�x��ԩ�#�=��#�=��#� ��MЛ�7Ao��� ��8d������tp::��N������tp::��6�cW]9:��6��+EWJ� 4(J� 4(��}�L� �Jѕғ�C�G�Qzeo��t���m��ћ.�4z��ͣ7O��������{�=�~O��������{�=�~O��U����UŜ�[f�W������t��+Gׇ��mF��;�+� c�* endstream endobj 50 0 obj <>stream Is it possible in principle to pierce the veil of a Jersey or Guernsey foundation? Indeed, it is striking that neither he nor Lords Neuburger or Mance described a single example of a case in which it would apply and, whilst four members of the Court expressed the view that piercing the corporate veil should not necessarily be limited to the “evasion principle”, none gave any indication of the principles which should determine what its limits are. 0000011812 00000 n However, Prest and the earlier Supreme Court decision in the VTB litigation[4], provide many illustrations of the alternative legal bases on which an equivalent remedy can be justified. h�b``�c``b`e`P8� Ȁ �@16� �7700�@���T�KZepQCg����� control it gained considerable publicity in Prest v Petrodel Resources Ltd & Others [2013] UKSC 34.The case played out some of the historical tensions between the Family and Chancery division over the ownership of property. Introduction. 0000009594 00000 n Many of the assets (primarily properties in London) were held by overseas companies controlled by the husband. The judgment of the Supreme Court in Prest v Petrodel Resources Ltd [2013] UKSC 34 was eagerly anticipated by family and corporate lawyers alike. 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. 0000009042 00000 n 2 Clarke described the principle of ‘veil-piercing’ as a doctrine.6 Lord Walker, however, was reluctant in adopting such terminology.7 8He doubted the existence of … In some instances the properties had been The majority of commentary in the wake of Prest v. Petrodel Resources Ltd has focused on the Supreme Court’s discussion of a court’s jurisdiction to pierce 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. Please contact [email protected]. Part I – Prest 2. Mr Prest denied they were his. Lord Sumption said "if it is not necessary to pierce the corporate veil, it is not appropriate to do so"[2] and Lord Clarke put the point more directly: "the court only has power to pierce the corporate veil when one of the more conventional remedies have proved to be of no assistance."[3]. 0000018903 00000 n Prest v Petrodel- the facts. SLA v HKL (FCMC7500/2010)一案，可能是香港首宗引用近日英國最高法院 Prest v Petrodel [2013] UKSC 34一案的案件，而該英國案件的裁決具有重大意義。 0000003365 00000 n Whilst there may be some debate about the extent to which the decision will be formally binding on later courts, as a practical matter it is beyond doubt that it will be the starting point of any future argument and, although the ink has been dry on the judgment for less than a month, the Court of Appeal has already indicated[1] that attempts to widen the scope of the doctrine are likely to prove difficult, if not impossible. 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. Become your target audience’s go-to resource for today’s hottest topics. 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. Secondly, if a claimant cannot establish any alternative way of identifying the company with its controller so as to provide him with a remedy, the Court can do this but only if control is proved and the controller was "under an existing legal obligation or liability or subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control". 0000001363 00000 n Indeed, although he claimed to be massively insolvent, he refused to comply with orders for full disclosure as to his assets. 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". "Lexology is a high quality service; the articles are very relevant and always useful", © Copyright 2006 - 2021 Law Business Research. Prest v Petrodel Resources Ltd & Others [2013] UKSC 34 Introduction. Understand your clients’ strategies and the most pressing issues they are facing. Analysis is undertaken of the judgment in Prest and of how judges have adapted and applied this judgment in subsequent cases. Neutral citation number [2013] UKSC 34. Lord Neuberger, President Lord Walker Lady Hale Lord Mance Lord Clarke Lord Wilson Lord Sumption . 0000007213 00000 n In the vast majority of fraud and corruption cases there will be alternate legal bases for a claim against the ultimate fraudster, including conspiracy to injure, knowing receipt, unjust enrichment and fraudulent mispresentation. The next generation search tool for finding the right lawyer for you. Prest (Appellant) v Petrodel Resources Limited and others (Respondents) Judgment date. Judgment details. 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 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. 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. He had set up number of companies. 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 … �� `�5-���� ���gP bm��$��1�L]\:��7������X���x�����:���A�����Aj���\5,F?�pg�00����@&En �Ȁ�@�P�D��3���=P>���l���g4ޘ�� bbL�J�0 l�8} endstream endobj 34 0 obj <>>>/Lang(en-GB)/Metadata 31 0 R/OpenAction 35 0 R/Outlines 26 0 R/PageLayout/SinglePage/Pages 30 0 R/Type/Catalog/ViewerPreferences<>>> endobj 35 0 obj <> endobj 36 0 obj <> endobj 37 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]/XObject<>>>/Rotate 0/Tabs/W/Thumb 28 0 R/TrimBox[0.0 0.0 595.276 841.89]/Type/Page>> endobj 38 0 obj [39 0 R] endobj 39 0 obj <>/Border[0 0 0]/H/N/Rect[496.559 38.3365 561.26 25.8804]/Subtype/Link/Type/Annot>> endobj 40 0 obj <> endobj 41 0 obj <> endobj 42 0 obj <> endobj 43 0 obj [/ICCBased 60 0 R] endobj 44 0 obj <> endobj 45 0 obj <>stream In Prest v Petrodel [2013] UKSC 34 the English Supreme Court undertook a review of the principles of English law which determine in what circumstances, if any, a court may set aside the separate legal personality of a company from its members and attribute to its members the legal consequences of the company’s acts. 0000001016 00000 n The business of those companies was originally limited to owning various residential properties, including the matrimonial home he shared with his wife. Keep a step ahead of your key competitors and benchmark against them. Questions? Facts. ��{��� �r$c��0�� �=����m�JdtOmK]G+uR2Ͻ�/�tQn:Fa����!��e�~���E2�*�l��Qa��x��2N�_K4�#�������Ui��p1�&˲����0�@��O�q����w�g ����8C�ֱ���lO�*T���mS�Em�`��¢�� �S���!�l0�Z0n�9�0�����軦�1��]��^����(��8l 0000114260 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. 0000005876 00000 n A clear divide emerged between family practitioners, who warned of a ‘cheat’s charter’, and company practitioners keen to protect the long-established principle of … As a result the “evasion principle” did not apply and the corporate veil would not be pierced. Prest v Petrodel Resources Ltd and Others: SC 12 Jun 2013 In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. Whilst Mrs Prest lost on many of her points of appeal, the Supreme Court looked at the overall asset structure of her … 0000004322 00000 n It is also a vital component of many frauds and a shield for the proceeds of fraud. Prest v Petrodel Resources Ltd [2013] UKSC 34. �^�6�ⅾƯ�K0y:�i����|��|��>S�yIL3��:�0�s��"�֦~��u����~�ӎ���a��r� 0000006614 00000 n 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. If you would like to learn how Lexology can drive your content marketing strategy forward, please email [email protected]. 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. 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". Judgment (PDF) Press summary (PDF) Judgment on BAILII (HTML version) However, the case has received most attention as a result of its treatment of “piercing the corporate veil”. JUDGMENT GIVEN ON . �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 0000112821 00000 n Introducing PRO ComplianceThe essential resource for in-house professionals. Prest (Appellant) v. Petrodel Resources Limited and . In the weeks preceding the Supreme Court’s decision in Petrodel Resources Ltd v Prest, 1 the case was the subject of much attention and commentary, both in the media and legal circles. The assets were held by the companies but they were held on resulting trust for the husband and so his equitable interest under that resulting trust was actually owned by him. The “well-recognised 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 … Heard on 5 and 6 March 2013 0000112439 00000 n 0000016255 00000 n The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. Faced with likely difficulty enforcing any claim against Mr Prest personally, Mrs Prest had joined the companies themselves as parties and sought an order that they should transfer the properties to her. 0000002308 00000 n Supreme Court’s decision in Prest v Petrodel Resources Ltd with a view to determining whether the decision is a step towards the abolition of piercing the corporate veil doctrine. His wife of 15 years claimed that he and Petrodel were one and the same, and that she should have a multi-million pound award funded from the companies’ properties. 33 0 obj <> endobj xref 33 36 0000000016 00000 n 0000002147 00000 n LITIGATION & ARBITRATION. %PDF-1.7 %���� H��T��� ��[���ȶ�ԩR�P�\�%��E�����"�7v|3idkw����V��] O�VUݏݯb���P�eRF�2@��2(�G� k)�Wa����m����ۃz!s L�|���A@���� /1?����L1�� �. Power up your legal research with modern workflow tools, AI conceptual search and premium content sets that leverage Lexology's archive of 900,000+ articles contributed by the world's leading law firms. This article examines the judicial approach to the corporate veil post-Prest v Petrodel Resources Ltd. 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). The First Instance Judge decided that s.24 of the Matrimonial Causes Act gave the Court power to treat the assets of the companies as if they were the husband's assets and so the companies could be ordered to transfer them to Mrs Prest. Central to Prest was the extent to which property held by a company controlled by a party Separate corporate personality is part of the bedrock on which the global economy is built. When their marriage failed Mrs Prest made a large claim against him for financial assistance based, in part, on the value of the real estate owned by that network of companies. 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. Has Prest v Petrodel made the law clearer? The issue was whether those properties could be brought into the calculation of the matrimonial assets. The Supreme Court (12,June 2013) case of Prest (Appellant) v Petrodel Resources Limited & Others (Respondents) [2013] UKSC 34 On appeal from: [2012] EWCA Civ 1395, outlines the proceedings for financial remedies following a divorce between Michael and Yasmin Prest. Whilst it will always be necessary for the victim of fraud to consider whether a case may be appropriate based on piercing the corporate veil, in light of the Prest decision it is most likely that a remedy will have to be sought on a different basis. Right lawyer for you, and when is it appropriate used in his commodity.... 89 ], [ 99 ] the calculation of the resulting trusts meant that it was unnecessary to pierce veil. London ) were held by overseas companies controlled by the husband he exercised total management control indeed, although claimed. The global economy is built is reverse veil piercing, and when is it possible in to. 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