Lord Neuberger, President Lord Walker Lady Hale Lord Mance Lord Clarke Lord Wilson Lord Sumption . There are two limitations upon the Court’s power to pierce the corporate veil. This is supported by the recent Supreme Court decision in Prest v Petrodel Resources Ltd, where a divorced wife claimed shares in houses owned by companies in which her ex-husband was the controlling shareholder. Is it possible in principle to pierce the veil of a Jersey or Guernsey foundation? As a result the “evasion principle” did not apply and the corporate veil would not be pierced. 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. 0000112439 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 … 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. 0000002172 00000 n 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). 0000005876 00000 n � endstream endobj 51 0 obj <>stream 0000018903 00000 n 12 June 2013 . others (Respondents) before . 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 … Piercing the corporate veil: a new era post Prest v Petrodel That a company has a separate legal personality from its shareholders is a well-established common law rule, derived initially from the case of Salomon v A Salomon [1897] AC 22 and reiterated in more recent authorities such as Adams v Cape Industries [1990] Ch 433 . What is reverse veil piercing, and when is it appropriate. �eD�F�XR�T����-���z�s���uܞ&�N�6&�HG�j~;�L���� �U��� 0000016255 00000 n 0000008453 00000 n Separate corporate personality is part of the bedrock on which the global economy is built. 0000009042 00000 n 0000001645 00000 n 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. It is also a vital component of many frauds and a shield for the proceeds of fraud. 0000007798 00000 n Facts: Mr Prest was an oil-trader. The “well-recognised Understand your clients’ strategies and the most pressing issues they are facing. 0000006614 00000 n Subsequently, the companies were used in his commodity business. The Supreme Court has just handed down its judgment in the landmark case of Prest v. Petrodel. However, the case has received most attention as a result of its treatment of “piercing the corporate veil”. This has overshadowed the Court’s decision to recognise a resulting trust, which achieved the same result as if the Court had pierced the corporate veil. The case provides a framework for an examination of a number of issues relating to the veil-piercing rule. 0000007213 00000 n That process is often referred to as "piercing the corporate veil". On 12 June 2013 the UK Supreme Court delivered judgment in Prest v Petrodel, a divorce case, and decided that properties purchased in the name of companies owned and controlled by the husband were held on trust for him and thus formed part of his assets. The first, and possibly the most important, is that it will only apply if there is no other legal method of achieving an equivalent result. 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. Part I – Prest 2. Prest (Appellant) v. Petrodel Resources Limited and . 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。 0000010642 00000 n 0000003715 00000 n 33 0 obj <> endobj xref 33 36 0000000016 00000 n 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. 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�� �. 0000003038 00000 n Prest (Appellant) v Petrodel Resources Limited and others (Respondents) Judgment date. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. Indeed, although he claimed to be massively insolvent, he refused to comply with orders for full disclosure as to his assets. This article examines the judicial approach to the corporate veil post-Prest v Petrodel Resources Ltd. 0000003365 00000 n 0000002147 00000 n 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. Prest v Petrodel – a new court approach to corporate structures Background Prest v Petrodel was a “big money” divorce case, concerning assets worth in excess of £17.5million. 0000001680 00000 n Although it was not strictly necessary for the court to address this point because it was already decided the appeal on the ground that a resulting trust existed, the Supreme Court nonetheless discussed the corporate veil doctrine at length. Prest v Petrodel Resources Ltd [2013] UKSC 34. Questions? Judgment (PDF) Press summary (PDF) Judgment on BAILII (HTML version) RELATED EXPERIENCE. JUDGMENT GIVEN ON . Prest v Petrodel- the facts. trailer <<927D96097C814E689E91921E881A61D6>]/Prev 131949>> startxref 0 %%EOF 68 0 obj <>stream 0000110762 00000 n UKSC 2013/0004. Introduction. The judgment of the Supreme Court in Prest v Petrodel Resources Ltd [2013] UKSC 34 was eagerly anticipated by family and corporate lawyers alike. 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". 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 … 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]. 0000003750 00000 n The Facts. The Court of Appeal overturned the First Instance decision leading to Mrs Prest’s appeal to the Supreme Court. 0000011812 00000 n 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. If you would like to learn how Lexology can drive your content marketing strategy forward, please email [email protected]. Prest v Petrodel Facts Claim by Mrs. Prest for ancillary relief under section 23 and 24 of the Matrimonial Causes Act 1973 in divorce proceedings against Mr. Prest. 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. Introduction. 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. In some instances the properties had been 0000112121 00000 n Persuading a court to identify a fraudster with a company he controls and which holds the benefit of the fraud can be a vital part of achieving any compensation for the victims of fraud. �^�6�ⅾƯ�K0y:�i����|��|��>S�yIL3��:�0�s��"�֦~��u����~�ӎ���a��r� Judgment details. 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. 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. The unanimous decision that the Matrimonial Causes Act does not create a mechanism for treating assets which do not belong to a party to the marriage as if they did will be of the utmost importance to practitioners of family law but will have little wider interest. h�b``�c``b`e`P8� Ȁ �@16� �7700�@���T�KZepQCg����� �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 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. Analysis is undertaken of the judgment in Prest and of how judges have adapted and applied this judgment in subsequent cases. [ 99 ] corporate veil ”, please email [ email protected ] calculation! 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