On 12 June 2013 The Supreme Court handed down a judgement which both family and corporate lawyers have been anticipating for sometime.
In the case of Prest v Petrodel the Court was aksed to consider whether, within divorce proceedings, the assets owned by the husband's company were assets to which he was "entitled" to under matrimonial law.
In this case the assets were properties, not owned by the husband but by the companies. Nevertheless, the husband had sole control over the properties and could do with them as he so wished.
Previously the Court of Appeal said that if properties belonged to the companies, they could not therefore belong to the husband and so would not form part of any divorce settlement. Simply because the parties were divoricng this would not allow the wife to pierce the corporate veil and that "a one man company does not metamorphose into a one man simply because the perosn with a wish to abstract its assets is his wife".
Today the Supreme Court decided that in this particular case the wife would succeed on her appeal, not on the basis of being allowed to pierce the corporate veil or that this was an exceptional case but rather that the companies held the properties on trust for the husband. The Court said that this was not becasue he was a 100% shareholer or because he controlled companies but rather how the companies came to own the properties in the first place.
The properties will form part of a £17.5 million divorce award.
For information or specific advice regarding matrimonial law, contact Lindsey Canning on 0114 266 6660, alternatively email [email protected].
