The disappointed ex-wife of oil tycoon, Michael Prest, has been granted permission to appeal the controversial Court of Appeal decision in Petrodel Resources Ltd & Ors -v- Prest & Ors  EWCA Civ 1395.
The Court of Appeal’s majority (2:1) decision on 26th October 2012 caused huge controversy in the family law world when they ruled that the High Court judge had been “wrong” to “pierce the corporate veil” and to equate the companies owned and controlled by Mr Prest with Mr Prest himself and to regard their assets as his. The Court of Appeal allowed the appeal brought by the three companies owned and controlled by Mr Prest against the Order requiring them to transfer assets to Mrs Prest. Mrs Prest has now been granted permission to appeal this decision.
The Court of Appeal decision highlights the tension that exists between, on the one hand, the fact that, in company law, a company is a separate legal entity that is entirely distinct from its members and, on the other, the inclination of the Family Division to look behind corporate structures if that is required in the interest of achieving fairness. Given the constitution of the Court of Appeal in this case, it is perhaps unsurprising that the former prevailed.
Lord Justice Thorpe, the only Family Law specialist sitting in the Court of Appeal and who delivered the dissenting judgment, warned that the Family Division judge’s overriding duty to achieve fairness would be defeated if company law allows a wealthy businessman to “hide” his assets in corporate structures. The Court of Appeal judgement can be read in full here.
The appeal will be heard in the Supreme Court on the 5th and 6th March 2013. The Family team at Hunters are eagerly awaiting the Supreme Court judgment and are following all the developments.