Company Assets and Divorce
Family, Divorce and Finances
In the case of Prest v Prest and others [2012] The Court of Appeal found that a judge had erred in the treatment of company assets.
In this case the husband was a successful businessman in international oil and trade. He was the sole owner and controller of a number of companies within a group.
During ancillary relief proceedings the wife sought an order for a lump sum, transfer orders in respect of properties held in company names and company shares.
The husband argued that no order could be made unless the judge was able to find the required impropriety as set out in case law to ‘pierce the corporate veil’. The judge found that there had been no impropriety but went on to hold that the husband was ‘entitled’ to the properties within the meaning of the Matrimonial Causes Act 1973, and therefore could make orders for the transfer of the properties. The judge had found that the assets of the companies were effectively the assets of the husband. The companies affected appealed.
The appeal was allowed. A company’s assets belonged to the company and could not be used to settle the personal obligations of the husband. In this case there was no justification to lift the corporate veil. The husband was therefore not entitled to the properties and the wife was unable to pursue an order for them.
Divorce Solicitors and Lawyers Eastbourne, Hailsham, Polegate, East Sussex
If you would like advice on divorce and finances please contact our Family Law Department for a free initial appointment in Eastbourne 01323 727321, Hailsham 01323 841481 or Polegate 01323 487051.
