1. This appeal arises out of proceedings for ancillary relief following a divorce. The principal parties before the judge, Moylan J, were Michael and Yasmin Prest. He was born in Nigeria and she in England. Both have dual Nigerian and British nationality. They were married in 1993, and during the marriage the matrimonial home was in England, although the husband was found by the judge to have been resident in Monaco from about 2001 to date. There was also a second home in Nevis. The wife petitioned for divorce in March 2008. A decree nisi was pronounced in December 2008, and a decree absolute in November 2011.

2. The husband is not party to the appeal in point of form, although he is present in spirit. The appeal concerns only the position of a number of companies belonging to the group known as the Petrodel Group which the judge found to be wholly owned and controlled (directly or through intermediate entities) by the husband. There were originally seven companies involved, all of which were joined as additional respondents to the wife’s application for ancillary relief. They were Petrodel Resources Ltd (“PRL”), Petrodel Resources (Nigeria) Ltd (“PRL Nigeria”), Petrodel Upstream Ltd (“Upstream”), Vermont Petroleum Ltd (“Vermont”), Elysium Diem Ltd, Petrodel Resources (Nevis) Ltd (“PRL Nevis”) and Elysium Diem Ltd (Nevis). Three of these companies, PRL, Upstream and Vermont, all incorporated in the Isle of Man, are the respondents in this court. PRL was the legal owner of the matrimonial home, which was bought in the name of the company in 2001 but was found by the judge to be held for the husband beneficially. There is no longer any issue about that property, which is apparently in the process of being transferred to the wife. In addition, PRL was the legal owner of five residential properties in the United Kingdom and Vermont is the legal owner of two more. The question on this appeal is whether the court has power to order the transfer of these seven properties to the wife given that they legally belong not to him but to his companies.

3. Part II of the Matrimonial Causes Act 1973 confers wide powers on the court to order ancillary relief in matrimonial proceedings. Section 23 provides for periodical and lump sum payments to a spouse or for the benefit of children of the marriage. Under section 24(1)(a), the court may order that “a party to the marriage shall transfer to the other party... such property as…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Prest v Petrodel Resources Ltd

Details

AGLC: Prest v Petrodel Resources Ltd [2013] UKSC 34
Case: [2013] UKSC 34
Decision Date

CaseChat Overview and Summary

The appeal arose out of proceedings for ancillary relief following a divorce between Michael and Yasmin Prest. Yasmin petitioned for divorce in 2008, and the divorce was finalized in 2011. During the proceedings, it was revealed that Michael controlled a number of companies that owned several properties in the United Kingdom. The central issue on appeal was whether the court had the power to order the transfer of these properties to Yasmin, given that they legally belonged to the companies and not to Michael. The appeal concerned only the position of three companies: Petrodel Resources Ltd, Petrodel Upstream Ltd, and Vermont Petroleum Ltd.

The legal issues the court had to decide were whether there was a general principle of law that allowed the court to disregard the separate legal personality of the companies, whether section 24(1)(a) of the Matrimonial Causes Act 1973 conferred a distinct power to disregard the corporate veil in matrimonial cases, and whether the companies held the properties on trust for Michael.

The court concluded that there was no general principle of law that entitled the court to disregard the separate legal personality of the companies, as the authorities showed that the separate legal personality of the company could not be disregarded unless it was being abused for an improper purpose. The court found no relevant impropriety in this case. The court also held that section 24(1)(a) of the Matrimonial Causes Act 1973 did not give the court power to order a spouse to transfer property to which he was not legally entitled. The court found that the properties were held by the companies on trust for Michael, and therefore, they fell within the scope of the court's power to make transfer of property orders under section 24(1)(a) of the Matrimonial Causes Act 1973.

The final orders of the court were that the appeal should be allowed, and the orders made by the judge against the three companies should be set aside. The companies were held to be trustees of the properties for Michael, and the court had power to order that they transfer these properties to Yasmin.

Orders