Prest v Petrodel: spouses cannot hide wealth in companies to avoid losing it upon divorce
By Ian Bradshaw
On 12 June 2013, the Supreme Court laid down a marker by unanimously allowing an appeal by Yasmin Prest and allowing her to get her hands on assets held by her ex-husband in numerous companies in his name. The thinking behind this decision appears to try and rebalance the power held by both parties upon a divorce. While it is true that any person can put their wealth into companies to protect themselves, the Supreme Court felt that this gave too much power to the economically powerful.
The ruling, on first glance, would seem to allow the courts to pierce the corporate veil in these circumstances — a decision favoured by those who wish the courts to deliver justice, rather than enforce the law. It contradicts long-standing principles that a company is independent of its shareholders and that ownership of a company will not allow for assets to be obtained in legal proceedings, unless in cases of fraudulent or dishonest use of the company. Contrast this with family law principles whereby courts take a strict view on spouses who own and control companies, with no third-party interests, especially where these companies have been used to help fund a wealthy family lifestyle…
If you are registered and logged in to the site, click on the link below to read the rest of the Goodman Derrick briefing. If not, please register or sign in with your details below.
News from Goodman Derrick
Briefings from Goodman Derrick
The Court of Appeal delivers an important decision in the turbulent area of relief from sanctions for non-compliance with court rules or orders.
The Inheritance and Trustees’ Power Bill received royal assent on 14 May to become the Inheritance and Trustees’ Power Act 2014.
Analysis from The Lawyer
Active financial management is vital, but with firms looking more closely at the process of debt and fee collection, the personal touch still counts
The lure of the law can kick in at any stage of life. We speak to four individuals who have made a radical switch to a legal career