Piercing the corporate veil: Prest v Petrodel Corp [2013] UKSC 34

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VTB Capital plc v Nutritek International Corp and others [2013] UKSC 5 [2013] 2 WLR 398 assumed that a doctrine permitting piercing of the corporate veil of a company existed, but decided that the doctrine could not permit a party to secure the imposition of a company’s contractual liability on those who controlled it.

Now the subject recurs a few weeks later in the decision of the UK Supreme Court on the matrimonial affairs of Mr and Mrs Prest, and the involvement of the companies controlled by Mr Prest. The companies owned the legal title to a substantial property portfolio. The trial judge in family proceedings ordered the transfer of some of those properties by Mr Prest to his wife in satisfaction of a lump-sum order. The Court of Appeal by a majority held that he had no power to do so.

Lord Sumption defined the bases on which the judge might have acted as (i) a power in the court to disregard the ownership of the properties by the companies; (ii) a power conferred by statute (the Matrimonial Causes Act 1973) to effect the transfers; and (iii) a finding that the companies were not, but the husband was, the beneficial owner of the properties…

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