Wealthy divorcing couples should keep an eye on this case, particularly where offshore companies are involved, after
Michael and Yasmin Prest, both in their 50s and married in 1993, spent most of their time in London. They had properties in Nigeria and the Caribbean and lived their life to a “very high standard". Mr Prest claimed to be worth £48m, but Mrs Prest said he could be worth hundreds of millions.
After their marriage broke down, they filed for a divorce. But Mr Prest lost the latest round of the legal struggle, which means his wife can now appeal against an earlier ruling.
It has been ruled that seven properties at the centre of the dispute could effectively be counted as assets of Mr Prest. Mrs Prest said she was “delighted and relieved” by the judgement.
Mr Prest had argued that his properties, worth millions of pounds, were not personally owned by him but by offshore companies. Appeal judges had concluded in October 2012 that an earlier ruling ordering Mr Prest to transfer the properties held in the names of companies he controlled was wrong. Mrs Prest, therefore, asked the Supreme Court, the highest Court here, to review the case.
In allowing her appeal, the Supreme Court ruled the properties were held on trust for Mr Prest by the companies.
During legal proceedings, Mr Prest has been criticised for failing to be frank about the true extent of his wealth. His conduct had been “characterised by persistent obstruction, obfuscation and deceit”, Lord Sumption said in the lead judgement.
But what does this mean for wealthy divorcing couples? This decision ensures that husbands are not able to deceive their wives and fail to obey Court orders by hiding behind a corporate frontage. The decision also makes it clear that the fact that properties are held in the name of a company does not always mean they are actually owned by the company.
However, the established company law principles do remain, which will preserve the character of most corporate structures as long as they are used for normal and legitimate purposes. It is when they are not that the Court is able to now say that properties in the name of a company are held on