Supreme Court delivers ruling which may affect high value South West divorces
In a ruling delivered on 13 June, the Supreme Court issued a judgement which may affect a number of high value divorces in the South West, and is welcomed by a leading Westcountry family lawyer for its fairness and common sense.
The case, Petrodel v Prest, showed that the husband purchased properties in London through various offshore companies, yet the Court of Appeal rejected the wife’s claims to have these properties transferred to her as part of her divorce settlement, due to the English law principle that a company has its own legal personality.
On appeal by the wife today the Supreme Court, whilst confirming that the divorce court had no special power to defeat a corporate legal personality, it said that in the Petrodel case the husband had injected assets into the company from his personal resources and therefore the company held the assets on trust for the husband.
They established that the husband was in effect the owner of the property held by the company and that the Court could transfer the asset directly to the wife as if it was legally owned by the husband rather than the company.
“This landmark ruling has many consequences for those who invest assets in corporate structures and subsequently divorce,” says Liz Allen, one of the UK’s leading divorce lawyers, from Stephens Scown LLP.
Liz continues, ”This ruling will be widely welcomed by those representing spouses in the South West, whose claims have been frustrated by questions over ownership of matrimonial assets.
"Now, in certain circumstances, if it can be demonstrated that the funds which purchased the property originally came from the spouse or spouses personally, then the Court can deal with the asset directly, in a way that effectively ignores the corporate structure.”
It can be seen that the Supreme Court has made a bold decision and also highlights the importance of considering pre and post nuptial agreements in conjunction with corporate restructuring.
Liz Allen is consistently ranked highly in the UK’s top two independent legal guides, Chambers and Legal 500, and is the only family lawyer in Devon and Cornwall to appear in the Citywealth Leaders List, an independent list of some of the best advisors in private wealth management in the world, for the 5th year running.
For more information visit www.stephens-scown.co.uk
