A Husband who ties up all his wealth within a limited company may be able to avoid having to transfer company assets to his Wife in Divorce Proceedings.
The case of Petrodel Resources Ltd v Prest will now be heard in the Supreme Court (formerly the House of Lords) following the controversial judgement made by the Court of Appeal that the husband in the proceedings, Mr Prest, need not transfer ownership of 14 properties to his wife as part of a divorce settlement.
The case raises the question of whether or not the Family Court has the jurisdiction to order the transfer of properties belonging to companies owned by one or both of the parties in financial remedy proceedings on divorce.
The 14 properties in various countries belong to a number of companies, including a Nigerian oil company called Petrodel Resources, which was co-founded by Mr Prest.
At a High Court hearing last year, Mr Justice Moylan judged the properties to effectively be Mr Prest’s assets and ordered him to transfer the properties to his ex-wife as part of the settlement process.
This ruling, however, was reversed by the Court of Appeal in October 2012 when Lord Justices Patten and Rimer found in favour of the company’s appeal, saying that Mr Justice Moylan had been wrong to find that Mr Prest-s sole ownership of the companies which owned the properties made him entitled to freely dispose of their assets.
In a dissenting judgement, Lord Justice Thorpe, who has a strong family law background, said that the fundamental principle was entitlement to assets as defined by the Matrimonial Causes Act 1973. He said that allowing Mr Prest to shield the companies’ properties from the settlement would defeat “the Family Division Judge’s overriding duty to achieve a fair result.”
The judgement was widely criticised, with commentators saying it could provide a way for wealthy husband’s to escape substantial divorce settlements.
The case will be heard by five justices on the 5th and 6th March 2013.
Further information on family law please contact or Family Team on 01302 341414, or firstname.lastname@example.org