Still Prest to disclose: Petrodel wound up

By Andrew Newton

This June, the decision of the Supreme Court in London in the divorce proceedings of Prest v Petrodel Resources Ltd and Others [2013] UKSC 34 was awaited with eager anticipation and trepidation by family, corporate and litigation practitioners alike. The expectation for the decision of the presiding Supreme Court justices hinged on the possibility that the previous Court of Appeal decision in this case could be overturned and the corporate veil pierced to allow for seven disputed properties to be transferred in the divorce award from Mr Prest, an oil trader, to his former wife.

The resulting unanimous decision of the Supreme Court justices found in favour of Mrs Prest, finding that Mr Prest was entitled on trust to the properties despite their legal ownership being within a group of companies that Mr Prest controlled, known as the Petrodel group. The court held that the manner in which the properties had been originally transferred to the companies left a presumption in equity that Mr Prest was beneficially entitled to the properties. This presumption was not satisfactorily rebutted, and the Supreme Court justices were left to draw adverse inferences from Mr Prest’s and the companies’ obstructive behaviour and failure to assist throughout proceedings.     

Three of the companies that made up the Petrodel group were incorporated in the Isle of Man, including the principal company in the Supreme Court litigation, Petrodel Resources, which held legal title to the majority of the disputed properties, including the matrimonial home. Since the Supreme Court’s decision in June, winding-up proceedings have progressed in the High Court of Justice of the Isle of Man to the appointment of a provisional liquidator and official receiver. The winding-up application was originally brought before the Manx Court by Munin Navigation Company in May 2012. It was re-amended on 28 June 2013…

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