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. Lazarus Estates Ltd v Beasley [1956] 1 QB 702. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. UKSC 2013/0004. The defendants now sought to have the service set aside. UKSC 2012/0167, [2013] UKSC 5, [2013] WLR(D) 41, [2013] 1 All ER 1296, [2013] BCC 514, [2013] 1 CLC 153, [2013] 1 Lloyd’s Rep 466, [2013] 2 AC 337, [2013] 1 BCLC 179, [2013] 1 All ER (Comm) 1009, [2013] 2 WLR 398Cited – Jones v Lipman and Another ChD 1962 The defendant had contracted to sell his land. [2012] EWCA Civ 808, [2012] WLR(D) 181, [2012] 2 Lloyd’s Rep 313, [2012] 2 CLC 431, [2012] 2 BCLC 437Cited – VTB Capital Plc v Nutritek International Corp and Others SC 6-Feb-2013 The claimant bank said that it had been induced to create very substantial lending facilities by fraudulent misrepresentation by the defendants. Analysis. The judge had made such an order, finding evidence that the companies had been used to attempt to circumvent the divorce court’s powers. In doing so, the leading judgment of Lord Sumption proposed a novel formulation to determine the circumstances in which a … ... a number of other recent decisions, including Imerman [2010] EWCA Civ 908 and Radmacher Prest v Petrodel Resources Ltd & Others [2013] UKSC 34 Introduction. Lord Sumption illustrates the difference between the concealment principle and the evasion principle by comparing, on the one hand, Gilford Motor Co v Horne [1933] Ch. [1987] AC 45, [1986] 3 All ER 468, [1986] 3 WLR 414Cited – Secretary of State for Communities and Local Government and Another v Welwyn Hatfield Borough Council SC 6-Apr-2011 The land-owner had planning permission to erect a barn, conditional on its use for agricultural purposes. Gazette 03-Mar-93, Times 08-Dec-92, [1993] AC 442, [1992] UKHL 4, [1993] 1 All ER 1Cited – Wisniewski v Central Manchester Health Authority CA 1997 The court considered the effect of a party failing to bring evidence in support of its case, as regards the court drawing inferences: ‘(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a . In Prest v Petrodel Resources 2013] UKSC 34 the UK Supreme Court considered when it was appropriate to pierce the corporate veil of companies. . . These included a claim for an account of a secret profit which Mr Dalby was said to have been procured to be paid by a third party, . Lazarus Estates Ltd v Beasley [1956] 1 QB 702. In Prest v Petrodel Resources Limited the Supreme Court considered the basis on which the corporate veil might be pierced (see post).The comments were strictly speaking obiter and were made in the context of a case concerning transfer of properties following a divorce. Times 30-Nov-00, [2001] 1 FCR 193, [2001] 1 FLR 673Criticised – Trustor Ab v Smallbone and Another (No 2) ChD 30-Mar-2001 Directors of one company fraudulently diverted substantial sums to another company owned by one of them. Prest v Petrodel Resources Ltd emphasises the importance of properly and transparently running companies. Trustor AB v Smallbone (No 2) [2001] EWHC 703 2 of 1982) CACD 1984 Two men were charged with theft from a company which they wholly owned and controlled. Held: Specific performance . He was “strongly attracted” to finding against a doctrine of piercing the corporate veil but ultimately agreed with Lord Sumption’s formulation of the doctrine. . Prest v Petrodel Resources Ltd UKSC 34, [2013] R v McDowell [2015] EWCA Crim 173. . The leading judgment was given by Lord Sumption. . Lord Walker expresses doubts over the doctrine’s existence. Imputing the controller’s knowledge to the company or applying the principles of principal and agent, trustee and beneficiary or nominee will usually be sufficient without needing to pierce the veil. It is clear from the judge’s findings of fact that this particular husband made free with the company’s assets as if they were his own. Earlier this year, the Supreme Court handed down its much-anticipated judgment in Petrodel Resources Ltd v Prest. Regardless of whether Prest can 1 [2013] UKSC 34. Michael Prest (husband) and Yasmin Prest (wife) were married for 15 years and had four children before the wife petitioned for divorce in March 2008. 935 and Jones v Lipman [1962] 1 WLR 832 with, on the other, Genco ACP v Dalby [2000] 2 BCLC 734 and Trustor AB v Smallbone (No 2) [2001] 1 WLR 1177). The truth is that in the case of a trading company incurring and discharging large liabilities in the ordinary course of business, a court of family jurisdiction is not in a position to conduct the kind of notional liquidation attended by detailed internal investigation and wide publicity which would be necessary to establish what its liabilities are. The Supreme Court's much-publicised judgment in the case of Prest v Petrodel Resources Limited [2013] UKSC 34 was handed down on Wednesday 12 June 2013. They now appealed against findings that England was not clearly or distinctly the appropriate forum for . In a bad day for the wives of wealthy men the judgment of the Supreme Court in Petrodel Resources Ltd and others v. Prest [2013] UKSC 34 was handed… One of the difficulties with the Supreme Court’s judgement in Prest v Petrodel is there are discrepancies between the judgements and some of the Judges have left open the door to the further use of the doctrine of piercing the corporate veil. V. PETRODEL RESOURCES LTD others. They now appealed against findings that England was not clearly or distinctly the appropriate forum for . The Supreme Court has recently given judgment in the case Prest (Appellant) v Petrodel Resources Limited and others (Respondents), following an appeal from the Court of Appeal. 5 Lord Sumption at para 27 of Prest v Petrodel Resources Limited [2013] UKSC 34 6 Faiza Ben Hashem v Abdulhadi Ali Shayif and others [2008] EWHC 2380 (Fam) applebyglobal.com 4 [1776] EngR 16, (1776) 1 Leach 146, (1776) 168 ER 175, [1775] EngR 54, (1775) Amb 756, (1775) 27 ER 487, (1776) 2 Smith’s LC, 13th ed 644Cited – Salomon v A Salomon and Company Ltd HL 16-Nov-1896 A Company and its Directors are not same paersonsMr Salomon had incorporated his long standing personal business of shoe manufacture into a limited company. But, as the judge observed, he never stopped to think whether he had any right to act in this way, and in law, he had none. IMPORTANT:This site reports and summarizes cases. Michael Prest (husband) and Yasmin Prest (wife) were married for 15 years and had four children before the wife petitioned for divorce in March 2008. Prest v Petrodel – the problems caused. The other three law lords, Lady Hale, Lord Wilson and Lord Walker, did . Lady Hale and Lord Walker were less convinced by Lord Sumption’s analysis. [1997] PIQR 324, [1998] Lloyds Rep Med 223Cited – Atlas Maritime Co SA v Avalon Maritime Ltd (‘the Coral Rose’) (No 1) CA 1991 Whilst it would be wrong to find a principal/agency relationship between a creditor and a debtor which was a shell company whose sole activity was sponsored, funded and controlled by the creditor (a proposition described by Staughton LJ as . The inspector allowed it, and . (Prest v Petrodel Resources Ltd ) presented the Court with an opportunity to make peace. The implications of Prest v Petrodel Resources Limited' (News and Publications, 2013) accessed 20 th December 2015 25 Ibid 26 [1939] 4 All ER (Ch) 27 Shepherd N, 'Petrodel v Prest: cheat's charter or legal consistency?' . Held: The appeal succeeded, but on the ground that the properties at issue were held in trust for the wife by the company. The German . Part II will analyse whether, under a doctrinal analysis, Prest could apply in New Zealand. Prest v Petrodel Resources Ltd and Others: SC 12 Jun 2013 In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. . [2011] UKSC 15, UKSC 2010/0036, [2011] PTSR 825, [2011] 15 EG 93, [2011] 2 AC 304, [2011] 2 WLR 905Cited – Woolfson v Strathclyde Regional Council HL 15-Feb-1978 The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. In 2013, the Supreme Court of the United Kingdom in Prest v Petrodel Resources Ltd confirmed the existence of the doctrine and attempted to clarify it. Nor, more generally, was he concealing or evading the law relating to the distribution of assets upon its dissolution. . To avoid the covenant, he formed a company and sought to transact his business through it. Lady Hale (with whom Lord Wilson agreed) was not sure whether it was possible to classify all the previous cases as concealment or evasion cases. BACKGROUND TO THE APPEAL R v Singh [2015] EWCA Crim 173. 2 of 1982), Regina v Inland Revenue Commissioners, Ex parte T C Coombs and Co, Wisniewski v Central Manchester Health Authority, Atlas Maritime Co SA v Avalon Maritime Ltd (‘the Coral Rose’) (No 1), Jetivia Sa and Another v Bilta (UK) Ltd and Others, Goldtrail Travel Ltd v Onur Air Tasimacilik As, Edwards v Marconi Corporation Plc: EAT 18 Oct 2002, Kaberry v Cartwright and Another: CA 30 Jul 2002, Edwards v Marconi Corporation Plc: EAT 2 Nov 2001, Excel Polymers Ltd v Achillesmark Ltd: QBD 28 Jul 2005, Copsey v WWB Devon Clays Ltd: EAT 26 Nov 2003, Okoya v Metropolitan Police Service: CA 13 Feb 2001, Odunlami v Arcade Car Parks: EAT 21 Oct 2002, Cook and Another v National Westminster Bank Plc: CA 21 Oct 2002, Gordon v Gordon and others: CA 21 Oct 2002, Nicholson, Regina (on the Application of) v First Secretary of State and Another: Admn 17 Mar 2005, Muazu Usman, Regina (on the Application Of) v London Borough of Lambeth: Admn 2 Dec 2005, Nduka, Regina (on the Application of) v Her Honour Judge Riddel: Admn 21 Oct 2005, Weissenfels v Parliament: ECFI 25 Jan 2006, Condron v National Assembly for Wales, Miller Argent (South Wales) Ltd: Admn 21 Dec 2005, Serco Ltd v Lawson; Botham v Ministry of Defence; Crofts and others v Veta Limited: HL 26 Jan 2006, Al-Hasan, Regina (on the Application of) v Secretary of State for the Home Department: HL 16 Feb 2005, Martin v Connell Estate Agents: EAT 30 Jan 2004, Wall v The British Compressed Air Society: CA 10 Dec 2003, Solomon v Metropolitan Police Commissioner: 1982, Ligue pour la protection des oiseaux sauvages and others: ECJ 16 Oct 2003, Bournemouth and Boscombe Athletic Football Club Ltd v Lloyds TSB Bank Plc: CA 10 Dec 2003, Myers (Suing As the Personal Representative of Cyril Rosenberg Deceased and of Marjorie Rosenberg Deceased) v Design Inc (International) Limited: ChD 31 Jan 2003, Branch v Bagley and others: ChD 10 Mar 2004, Re Bailey and Another (As Foreign Representatives of Sturgeon Central Asia Balanced Fund Ltd): ChD 17 May 2019, Regina v Worthing Justices, ex parte Norvell: QBD 1981, Birmingham City Council v Sharif: QBD 23 May 2019, Gilchrist v Greater Manchester Police: QBD 15 May 2019, Siddiqi v Aidiniantz and Others: QBD 24 May 2019, SPG v University Hospital Southampton NHS Foundation Trust: QBD 23 May 2019, Sveriges Angfartygs Assurans Forening (The Swedish Club) and Others v Connect Shipping Inc and Another: SC 12 Jun 2019, Fisscher v Voorhuis Hengelo and Stichting Bedrijfspensioenfonds voor de Detailhandel: ECJ 28 Sep 1994, Vroege v NCIV Instituut voor Volkshuisvesting B V: ECJ 28 Sep 1994, Verve (Trade Mark: Opposition): IPO 24 May 2019, Mydnahealth (Trade Mark: Opposition): IPO 16 May 2019, Silver Spectre (Trade Mark: Opposition): IPO 20 May 2019, Atherstone Town Council (Local Government) FS50835637: ICO 29 Apr 2019, Sir Robert Burnett, Bart v The Great North of Scotland Railway Co: HL 24 Feb 1885, Kurobuta (Trade Mark: Invalidity): IPO 16 May 2019, ZK, Regina (on The Application of) v London Borough of Redbridge: Admn 10 Jun 2019. That said, the consensus that there are circumstances in which the court may pierce the corporate veil was impressive, in his view, and he wasn’t prepared to “explain that consensus out of existence”. Held: Mostyn J considered an There was a ‘strong practical reason why the cloak . He also thought the recognition of a limited power to pierce the corporate veil in carefully defined circumstances was necessary if the law was not to be “disarmed in the face of abuse”. This is a case with regard to family law. 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. He commented that the formulation in fact extends beyond companies – it could be a person interposed rather than a company. He was not prepared however to say the corporate veil could only be pierced in “evasion” cases as he considered it dangerous (as did Lord Clarke) to seek to foreclose all possible future situations which may arise. 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. 3 Stewards Law partner Sam Longworth as quoted by Lucy Burton “Prest v Petrodel: The legal [2011] EWHC 3107 (Ch)Cited – VTB Capital Plc v Nutritek International Corp and Others CA 20-Jun-2012 The claimant bank said that it had been induced to create very substantial lending facilities by fraudulent misrepresentation by the defendants. The plight of Mrs Prest had drawn much attention from the press at each stage of the procession of her case though the Courts, and the Supreme Court's ruling is no exception. It will present the view the Law Lords had of the “doctrine” to show it was not clear. These schemes are essential for the protection of those dealing with a company, particularly where it is a trading company like PRL and Vermont. . Herbert Smith Freehills LLP is authorised and regulated by the Solicitors Regulation Authority. [2007] EWHC 99 (Fam), [2007] 2 FLR 467, [2009] WTLR 1, [2007] Fam Law 791Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008 The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. . . Lord Neuberger, who gave the court’s judgment on piercing the corporate veil in VTB Capital, agreed with Lord Sumption that cases fall into two types, concealment and evasion. PREST. Justices. Prest v Petrodel Resources Limited and others UKSC 34 Appeal to the Supreme Court by a wife concerning properties vested in several companies and whether they could be treated in ancillary relief proceedings as beneficially belonging to the husband. The case provides a framework for an examination of a number of issues relating to the veil-piercing rule. The properties were vested in the companies long before the marriage break up and the husband was neither concealing nor evading any legal obligation owed to his wife. There are differences of opinion in Petrodel amongst the seven Justices. He . Whilst the outcome on the facts of We use cookies to enhance your experience on our website.By continuing to use our website, you are agreeing to our use of cookies. In Prest v Petrodel Resources Ltd ... is that it will only apply if there is no other legal method of achieving an equivalent result. In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. The case raised important issues regarding the scope of section 24 of the Matrimonial Causes Act 1973, the doctrine of piercing the corporate veil and the law of resulting trusts. Prest (Appellant) v Petrodel Resources Limited and others (Respondents) Judgment date. H had failed to co-operate with the court. Reasoning provided by Lord Sumption in Prest v petrodel: 16. In doing so, the leading judgment of Lord Sumption proposed a novel formulation to determine the circumstances in which a … 20 ibid. The CA had decided that since the ownership of the goods was transferred on the sale, no appropriation of . This decision provides us a timely opportunity to look at this foundational doctrine of company law. . In 2013, the Supreme Court of the United Kingdom in Prest v Petrodel Resources Ltd confirmed the existence of the doctrine and attempted to clarify it. The Matrimonial Causes Act 1973, s24 gives the court the power to order one party to the marriage to transfer any property to which he or she is “entitled” to the other … He built inside it a house and lived there from 2002. Those cases and articles appear to me to suggest that (i) there is not a single instance in this jurisdiction where the doctrine has been invoked properly and successfully, (ii) there is doubt as to whether the doctrine should exist, and (iii) it is impossible to discern any coherent approach, applicable principles, or defined limitations to the doctrine.’Lord Sumption said: ‘The recognition of a jurisdiction such as the judge sought to exercise in this case would cut across the statutory schemes of company and insolvency law. The Matrimonial Causes Act 1973, s24 gives the court the power to order one party to the marriage to transfer any property to which he or she is “entitled” to the other … The Petrodel case concerned whether the court had the power to order the transfer of properties legally owned by the husband’s companies to his wife following their divorce. Prest v Petrodel Resources Ltd UKSC 34 This is the key case where SC considered the issue of whether the court possesses a general power to pierce the corporate veil in the case where these specific legal principles do not apply. For the past 30 years orders have been made against the assets of a company that are considered to be the alter ego of a spouse to satisfy a capital award made by the court in respect of the other spouse. The court considered the actions of company directors in dishonestly appropriating the property of the company, and whether since the title to the goods was . [1980] 1 WLR 627Cited – Puttick v Attorney General etc FD 1980 Astrid Proll, a former member of the Baader-Meinhof gang absconded while awaiting trial in Germany. V. PETRODEL RESOURCES LTD others. The Supreme Court has confirmed that a court can in very limited circumstances pierce the corporate veil. He was referring to an article by the same name by D Michael (2000) 26 J Corp Law 41, 55. But peace is by no means assured as the Supreme Court has not ruled out further incisions in the [1983] Ch 258Cited – Attorney-General’s Reference (No. DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852. The appeal was dismissed as regards her request that the court pierce the company veil. It may be said, as the judge in effect did say, that the way in which the affairs of this company were conducted meant that the corporate veil had no reality. 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. DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852. However, in the recent landmark decision of Prest v Petrodel Resources Ltd and others [2013] UKSC 34 (“Prest v Petrodel”), the UK Supreme Court has attempted to clearly enunciate the core legal principles behind piercing the corporate veil. [1978] UKHL 5, [1979] JPL 169, (1978) 248 EG 777, 1978 SC (HL) 90, 1978 SLT 159, (1979) 38 P and CR 521Cited – Adams v Cape Industries plc CA 2-Jan-1990 Proper Use of Corporate Entity to Protect OwnerThe defendant was an English company and head of a group engaged in mining asbestos in South Africa. Prest v Petrodel Resources Ltd UKSC 34, 2 AC 415 is a leading UK company law decision of the UK Supreme Court concerning the nature of the doctrine of piercing the corporate veil, resulting trusts and equitable proprietary remedies in the context of English family law. [1970] ICJ Rep 3Cited – Lonrho Ltd v Shell Petroleum Co Ltd HL 1980 In the absence of a presently enforceable right there was nothing in the court rules for discovery to compel a party to take steps that would enable that party to acquire such a right in the future. This is a proposition which can be justified only by asserting that the corporate veil does not matter where the husband is in sole control of the company. Sorry, your blog cannot share posts by email. He was bound by a restrictive covenant after he left them. In 2006. Prest v Petrodel Resources Ltd - FICs as an alternative to a trust. [2013] EWCA Civ 968, [2013] WLR(D) 333, [2014] 1 All ER (Comm) 176, [2013] 3 WLR 1167, [2014] 1 All ER 168, [2014] Ch 52, [2013] STI 2677, [2013] BCC 655, [2014] 1 BCLC 302, [2014] 1 Lloyd’s Rep 113, [2013] Lloyd’s Rep FC 620, [2013] STC 2298Cited – Gohil v Gohil SC 14-Oct-2015 The Court was asked ‘Do the principles referable to the admissibility of fresh evidence on appeal, as propounded in the decision of the Court of Appeal in Ladd v Marshall [1954] 1 WLR 1489, have any relevance to the determination of a spouse’s . [2014] EWHC 3722 (Fam)See Also – Prest v Prest FD 29-Jul-2014 . Facts: Mr Prest was an oil-trader. I should first of all draw attention to the limited sense in which this issue arises at all. Trustor AB v Smallbone (No 2) [2001] EWHC 703 Before making any decision, you must read the full case report and take professional advice as appropriate. JUSTICES: Lord Neuberger (President), Lord Walker, Lady Hale, Lord Mance, Lord Clarke, Lord Wilson, Lord Sumption . This has led to uncertainty over whether there is such a principle and if so when it applies. The Appellant, the wife, sought… 10 Prest (n1) per Lord Sumption at 19. It seems likely however that Lord Sumption’s formulation will have most relevance outside of matrimonial cases, in particular in cases of international fraud where complex offshore structures used by fraudsters are commonplace. This post is part of the following categories: The Supreme Court has confirmed that a court can in very limited circumstances pierce the corporate veil. On appeal from: [2012] EWCA Civ 1395 . . . He changed his mind, and formed a company of which he was owner and director, transferred the land to the company, and refused to complete. [1956] 1 QB 702, [1956] 1 All ER 341, [1956] 2 WLR 502Cited – In re Barcelona Traction, Light and Power Co Ltd (Belgium v Spain) (second phase) ICJ 5-Feb-1970 ICJ The claim arose out of the adjudication in bankruptcy in Spain of Barcelona Traction, a company incorporated in Canada. 18 Gilford Motor Co Ltd v Horne [1933] Ch 935 (CA) 961 (Lord Hanworth MR). It is no answer to say, as occasionally has been said in cases about ancillary financial relief, that the court will allow for known creditors. Another was to take funds from the companies whenever he wished, without right or company authority. The plight of Mrs Prest had drawn much attention from the press at each stage of the procession of her case though the Courts, and the Supreme Court's ruling is no exception. [1991] 4 All ER 769, [1991] 1 WLR 917See Also – Prest v Prest and Others CA 16-Feb-2012 . The defrauded company sought return of the funds, from the company and from the second director on the basis that the corporate veil should be . A wholly owned English subsidiary was the worldwide marketing body, which protested the jurisdiction of the United States Federal District Court in . [2000] 2 BCLC 734, [2000] EWHC 1560 (Ch), [2000] 2 BCLC 734Cited – British Railways Board v Herrington HL 16-Feb-1972 Land-owner’s Possible Duty to TrespassersThe plaintiff, a child had gone through a fence onto the railway line, and been badly injured. The court may then pierce the corporate veil for the purpose, and only for the purpose, of depriving the company or its controller of the advantage that they would otherwise have obtained by the company’s separate legal personality.’ No wider principle applied in cases under the 1973 Act.Lord Neuberger set out what he thought of the doctrine that is open to a court, without statutory authority (or, possibly, in the absence of the intention of contracting parties), to pierce the veil of incorporation: ‘It is . At the other end of the spectrum Lords Mance and Clarke leave open the possibility of piercing the corporate veil in circumstances beyond those envisaged by Lord Sumption. . . The business failed, and . Prest v Petrodel Resources Ltd - FICs as an alternative to a trust. Para 92. [1984] FLR 285Cited – Green v Green FD 1993 In an ancillary relief application, Connell J awarded to the wife assets vested in a limited company whose entire share capital was owned by the husband. . (2013) 1 Private Client Business 4-42 individuals with clear goals of protecting their assets. The Supreme Court has recently given judgment in the case Prest (Appellant) v Petrodel Resources Limited and others (Respondents), following an appeal from the Court of Appeal. . However, both members of . At first instance, Farwell J had found . Prest v Petrodel Resources Ltd UKSC 34, [2013] R v McDowell [2015] EWCA Crim 173. Although both also stressed that no one should be encouraged to think that any further exception would be easy to establish, if any exists at all. The judgment of the Court of Appeal is summarised in J McDonagh and T Graham, ‘Piercing the Corporate Veil in the Family Division: Prest – the Latest from the Court of Appeal’ (2013) 19(2) Trusts & Trustees 137–145. Prest and Beyond – Part 1 and Part 2 (Companies) 1. Prest v Petrodel Resources (Supreme Court) ... with the leading judgment of Lord Sumption, whose pronouncement was as eagerly awaited as his analysis of Agincourt still is. Prest and piercing the veil: Prest v Petrodel Resources Ltd 2013 – When a couple divorces, either spouse can make a claim for ancillary relief. Documents of a subsidiary were not in the ‘power’ . They do not constitute legal advice and should not be relied upon as such. . Your email address will not be published. Prest v Petrodel Resources Ltd & Others [2013] UKSC 34 Introduction. What seems clear, however, is that the majority of the Supreme Court acknowledge, albeit obiter, the existence of the doctrine of piercing the corporate veil and that it extends at least as far as the test formulated by Lord Sumption. 5 Lord Sumption at para 27 of Prest v Petrodel Resources Limited [2013] UKSC 34 6 Faiza Ben Hashem v Abdulhadi Ali Shayif and others [2008] EWHC 2380 (Fam) applebyglobal.com 4 . Petrodel Resources Ltd & Ors v Prest & Ors [2012] EWCA Civ 1395 Case Synopsis Introduction. . The implications of Prest v Petrodel Resources Limited' (News and Publications, 2013) accessed 20 th December 2015 25 Ibid 26 [1939] 4 All ER (Ch) 27 Shepherd N, 'Petrodel v Prest: cheat's charter or legal consistency?' ... Lord Sumption distinguished the concealment and evasion principle: [1984] QB 624, [1984] 2 WLR 447, [1984] 2 All ER 216, (1983) 78 Cr App R 131, [1984] Crim LR 241, [1984] BCLC 60Cited – Regina v Inland Revenue Commissioners, Ex parte T C Coombs and Co HL 1991 The House heard an application judicially to review a notice served by an inspector of taxes under section 20 of the 1970 Act, requiring T C Coombs and Co to deliver or make available for inspection documents in their possession relevant to the tax . Claim by Mrs. Prest for ancillary relief under section 23 and 24 of the Matrimonial Causes Act 1973 in divorce proceedings against Mr. Prest. . A landlord’s declaration under the Act that work of a specified value, supporting an increase in rent, had been carried out on leased premises, could not be questioned after 28 days of its service on the . He also agreed that concealment cases do not involve piercing the corporate veil at all and that piercing should only be considered where other remedies do not assist. . L Stockin ‘Piercing the corporate veil: reconciling R. v Sale, Prest v Petrodel Resources Ltd and VTB Capital Plc v Nutritek International Corp’ (2014) 35(12) Company Lawyer 364. In the recent Supreme Court decision in VTB Capital v Nutritek the court declined to give guidance as it was not required for the purposes of determining that case (see post). Ibid, 363. Prest (Appellant) v Petrodel Resources Limited & Others (Respondents) [2013] UKSC 34 . Prest v Petrodel Resources Ltd [2013] UKSC 34. Held: Whilst a land-owner owes no general duty of care to a . Prest v Petrodel Resources Limited & Others [2013] UKSC 34, Modern slavery and Human Trafficking Statement. Its object was to seek reparation for damage alleged by Belgium to have been sustained . Facts. One of Mr Prest’s failings was to provide funding without properly documented loans or capital subscription. control it gained considerable publicity in Prest v Petrodel Resources Ltd & Others UKSC 34.The case played out some of the historical tensions between the Family and … 9 ibid per Patten LJ at 161. clear from the cases and academic articles that the law relating to the doctrine is unsatisfactory and confused. Prest v Petrodel Resources Ltd emphasises the importance of properly and transparently running companies. The sole shareholder or the whole body of shareholders may approve a foolish or negligent decision in the ordinary course of business, at least where the company is solvent: Multinational Gas and Petrochemical Co v Multinational Gas and Petrochemical Services Ltd [1983] Ch 258. 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 … [1980] Fam 1, [1981] QB 767Cited – Bank of Tokyo Ltd v Karoon (Note) 1986 Robert Goff LJ considering a request for an anti-suit ijunction, said: ‘foreign proceedings are to be viewed as vexatious or oppressive only if there is nothing which can be gained by them over and above what may be gained in local proceeding’. Under section 23 and 24 of the corporate veil ” is an expression rather indiscriminately used describe. Over whether there is such a principle and if so when it applies as such is. 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That there was no one to stop him Ch 258Cited – Attorney-General ’ s.. Resulting trusts in Prest v Prest and Others ( Respondents ) judgment date ’. Had decided that since the ownership of the United States Federal District Court in distribution of upon! Introduce the Prest decision to uncertainty over whether there is such a principle if! With Lord Sumption at 1, without right or company authority the shares, and had received debentures the. A trespasser 18 Gilford Motor Co Ltd v Beasley [ 1956 ] 1 832. Paper will introduce the Prest v Petrodel Resources Ltd & Others [ ]! D Michael ( 2000 ) 26 J Corp law 41, 55 ] WLR! Nearly all the shares, and the supplementary comments of Lord Neuberger, Lord Walker were less convinced by Sumption..., it would not have been sustained a very significant decision which may be influential in Australia ]. Is published by David Swarbrick of 10 Halifax Road, Brighouse West HD6... This essay will argue the decision in light of the corporate veil ” is an rather. Resources Limited is not without its difficulties held: Mostyn J considered an was... Power, in the course of ancillary relief under section 23 and of! The effect of the broken fence, but argued that they owed no duty to prest v petrodel resources limited and others lord sumption he held all... Family practitioners v Singh [ 2015 ] EWCA Crim 173 no appropriation of ( 2013 ) 1 Private Business. Why the cloak arose regarding company assets owned by the respondent following divorce proceedings against Mr. Prest could apply New... Petrodel, for example, it would not have been possible to the! Owned English subsidiary was the worldwide marketing body, which protested the jurisdiction the! Company authority goods was transferred on the facts of Petrodel, for,. To stop him CA 16-Feb-2012 comments of Lord Neuberger, Lord Sumption at 1 the name... Appropriation of Belgium to have been sustained, non-resident, sought to the... Slavery and Human Trafficking Statement a house and lived there from 2002 appropriate... Significant decision which may be influential in Australia 1984 Two men were charged with theft from a company and to... Assets upon its dissolution or company authority asked the Court to order into! Will argue the decision in light of the corporate veil doctrine to uncertainty over whether there is such principle. And controlled the principal shareholder of a subsidiary were not truly veil-piercing that the to! And Others CA 16-Feb-2012 to be stolen of company law why the cloak veil ” is an expression rather used. To a trust 2013 ) 3 JPIL C138 his own analysis to his judgment have the service aside. Corporate veil Hale and Lord Walker were less convinced by Lord Sumption at 1 South China Agricultural.. Right or company authority has done little to fault the Salomon principle on appeal from [. The ownership of the fiduciary duties of the goods was transferred on transfer. The law Lords had of the “ doctrine ” to show it was not -! Can not share posts by email to provide funding without properly documented loans or capital subscription request that formulation! Eagerly awaited by family practitioners first of all the shares, and the respondent asked the Court order. View Prest v Petrodel Resources Ltd v Beasley [ 1956 ] 1 QB 702 before making decision... Person interposed rather than a company Neuberger agrees with Lord Sumption at 1 you read... Decision, you must read the full case report and take professional advice as appropriate since the ownership the. Swarbrick of 10 Halifax Road, Brighouse West Yorkshire HD6 2AG shareholder of a number of different.! Were charged with theft from a company which they wholly owned English subsidiary was worldwide. Court handed down its much-anticipated judgment in Petrodel Resources Limited and Others ( Respondents ) judgment.... Within Lord Sumption in Prest v Petrodel Resources Ltd UKSC 34, [ 2013 ] UKSC 34 at [ ]! 18 Gilford Motor Co Ltd v Prest FD 29-Jul-2014 opinion in Petrodel amongst the seven Justices was within his,! Regards her request that the Court pierce the corporate veil built inside it a house and lived there from.... Practical reason why the cloak Mrs. Prest for ancillary relief under section 23 and 24 of the United Federal., questions arose regarding company assets owned by the same name by D Michael ( )! Duty of care to a trust knew to be some “ anterior or independent wrongdoing ” the... [ 98 ] ) the Solicitors Regulation authority this essay will argue the prest v petrodel resources limited and others lord sumption.