There are differences of opinion in Petrodel amongst the seven Justices. This article will critically evaluate the significance of the Prest v Petrodel Resources Ltd decision in light of the corporate veil doctrine. After a comprehensive review of all the authorities, Munby J said: ‘The . DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852. 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. . The inspector allowed it, and . [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. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. [2014] EWHC 3430 (Fam)See Also – Prest v Prest CA 7-Jul-2015 H appealed against an order made under the 1869 Act as respects arrears under a maintenance order. 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. [1991] 2 AC 283, [1991] 2 WLR 682, [1991] 3 All ER 623Cited – Director of Public Prosecutions v Gomez HL 3-Dec-1992 The defendant worked as a shop assistant. . IMPORTANT:This site reports and summarizes cases. On 12 June 2013 the UK Supreme Court delivered judgment in Prest v Petrodel, a divorce case, and decided that properties purchased in the name of companies owned and controlled by the husband were held on trust for him and thus formed part of his assets. V. PETRODEL RESOURCES LTD others. . Held: The appeal succeeded, but on the ground that the properties at issue were held in trust for the wife by the company. The decision in Prest v Petrodel is an important and helpful one as it makes some attempt to identify the principle underpinning the jurisdiction and to clarify the situations in which it will be possible to pierce the corporate veil and to limit its application to those situations in which it is justified. The defendants now sought to have the service set aside. Its object was to seek reparation for damage alleged by Belgium to have been sustained . . This essay will argue the decision has done little to fault the Salomon principle. There have been a number of cases over the last 80 or so years suggesting the corporate veil can be pierced, but they haven’t always been easy to reconcile. R v Singh [2015] EWCA Crim 173. 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. Earlier this year, the Supreme Court handed down its much-anticipated judgment in Petrodel Resources Ltd v Prest. 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. [2012] EWCA Civ 325, Cited by: Cited – Jetivia Sa and Another v Bilta (UK) Ltd and Others CA 31-Jul-2013 Defendants appealed against refusal of their request for a summary striking out for lack of jurisdiction, of the claims against them arising from their management of the insolvency of the first defendant. According to Lord Sumption, the principle applies when a person is under an existing legal obligation or liability or is subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control. 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. [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 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. https://en.wikipedia.org/wiki/Jonathan_Sumption,_Lord_Sumption [2015] EWCA Civ 714Cited – Goldtrail Travel Ltd v Onur Air Tasimacilik As SC 2-Aug-2017 At first instance the appellant had dishonestly assisted another party to defraud the respondent, and ordered payment of substantial damages. . [1933] All ER 109, [1933] Ch 935Cited – A v A FD 29-Jan-2007 Munby J referred to the robust approach which had always been adopted in the Family Division in seeing through sham arrangements designed to hide the ownership of assets of the marriage by vesting them in relatives or companies which were in reality . [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. Petrodel Resources Ltd & Ors v Prest & Ors [2012] EWCA Civ 1395 Case Synopsis Introduction. ... Lord Sumption distinguished the concealment and evasion principle: Prest (Appellant) v Petrodel Resources Limited and others (Respondents) Judgment date. Lord Mance agreed with Lord Sumption and the supplementary comments of Lord Neuberger. 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. [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. . . 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. The evasion principle is different in that if no piercing takes place, the separate legal personality will defeat the right or frustrate its enforcement. Held: Specific performance . Part II will analyse whether, under a doctrinal analysis, Prest could apply in New Zealand. But that is plainly not the law.’ Lord Neuberger, President, Lord Walker, Lady Hale, Lord Mance, Lord Clarke, Lord Wilson, Lord Sumption [2013] UKSC 34, [2013] WLR(D) 237, [2013] 3 FCR 210, [2013] 4 All ER 673, [2013] Fam Law 953, [2013] 2 FLR 732, [2013] BCC 571, [2013] 2 AC 415, [2013] WTLR 1249, [2013] 3 WLR 1, UKSC 2013/0004 Bailii, Bailii Summary, SC Summary, SC Matrimonial Causes Act 1973 23 England and Wales Citing: Appeal from – Petrodel Resources Ltd and Others v Prest and Others CA 26-Oct-2012 The parties had disputed ancillary relief on their divorce. The Supreme Court has confirmed that a court can in very limited circumstances pierce the corporate veil. The German . The other three law lords, Lady Hale, Lord Wilson and Lord Walker, did . 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. The problem about this is that if, as the judge thought, the property of a company is property to which its sole shareholder is ‘entitled, either in possession or reversion’, then that will be so even in a case where the sole shareholder scrupulously respects the separate personality of the company and the requirements of the Companies Acts, and even in a case where none of the exceptional circumstances that may justify piercing the corporate veil applies. 11 Adams v Cape Industries Plc 1990 Ch 433 Times 30-Mar-01, Gazette 17-May-01, [2001] 1 WLR 1177, [2001] EWHC 703 (Ch)Cited – Kremen v Agrest (No 2) FD 3-Dec-2010 An application was made in ancillary relief case to set aside the transfer of a share in a company said to have been backdated to defeat the court’s jurisdiction. Held: The House declined to allow the principal shareholder of a company to recover compensation for the . Prest (Appellant) v Petrodel Resources Limited & Others (Respondents) [2013] UKSC 34 . 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. 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. These schemes are essential for the protection of those dealing with a company, particularly where it is a trading company like PRL and Vermont. They now appealed against findings that England was not clearly or distinctly the appropriate forum for . 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. Analysis. On appeal from: [2012] EWCA Civ 1395 . This decision provides us a timely opportunity to look at this foundational doctrine of company law. . Prest v Petrodel resources ltd are famIly Investment comPanIes stIll ... (Lord Sumption giving the lead judgment) was by a different route from Moylan J, and it considered . 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, . [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’. In Prest v Petrodel Resources Ltd UKSC 34, the UK Supreme Court has recently reviewed the English law in this area, concluding that the Court has a distinct but limited … They sought to . Prest v Petrodel Resources Ltd UKSC 34, [2013] R v McDowell [2015] EWCA Crim 173. The three companies, each in the substantial ownership of the husband, challenged the orders made against them saying there was no jurisdiction to order their property to be conveyed to the . Jonathan Philip Chadwick Sumption, Lord Sumption, OBE, PC, FSA, FRHistS (born 9 December 1948), is a British author, medieval historian and former senior judge who sat on the Supreme Court of the United Kingdom between 2012 and 2018.. Sumption was sworn in as a Justice of the Supreme Court on 11 January 2012, succeeding Lawrence Collins, Baron Collins of Mapesbury. The articles published on this website, current at the dates of publication set out above, are for reference purposes only. . This decision provides us a timely opportunity to look at this foundational doctrine of company law. . Prest v Petrodel Resources Ltd [2013] UKSC 34. 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