BACKGROUND TO THE APPEAL . He was referring to an article by the same name by D Michael (2000) 26 J Corp Law 41, 55. . 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. . Prest and Beyond – Part 1 and Part 2 (Companies) 1. Held: Whilst a land-owner owes no general duty of care to a . 3 Stewards Law partner Sam Longworth as quoted by Lucy Burton “Prest v Petrodel: The legal 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 … To avoid the covenant, he formed a company and sought to transact his business through it. The decision in Petrodel has been eagerly awaited by family practitioners. She thought they might simply be examples of the principle that the individuals who operate limited companies should not be allowed to take unconscionable advantage of the people with whom they do business. 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 . In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. The circumstances in which property held by a company can be attributed to those who control it gained considerable publicity in Prest v Petrodel Resources Ltd & Others [2013] UKSC 34.The case played out … Prest v Petrodel Resources Ltd - FICs as an alternative to a trust. . . They now appealed against findings that England was not clearly or distinctly the appropriate forum for . Prest and piercing the veil: Prest v Petrodel Resources Ltd 2013 – When a couple divorces, either spouse can make a claim for ancillary relief. Analysis. . Regardless of whether Prest can 1 [2013] UKSC 34. Herbert Smith Freehills LLP is authorised and regulated by the Solicitors Regulation Authority. . . [1983] Ch 258Cited – Attorney-General’s Reference (No. 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. In 2006. . [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 . [2010] EWHC 3091 (Fam), [2011] 2 FLR 490, [2011] Fam Law 568Cited – Gilford Motor Co Ltd v Horne CA 1933 The defendant was the plaintiff’s former managing director. [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. Lady Hale and Lord Walker were less convinced by Lord Sumption’s analysis. Petrodel Resources Ltd v Prest [2012] EWCA Civ 1395, [2013] 2 WLR 557, [63]. 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. In doing so, the leading judgment of Lord Sumption proposed a novel formulation to determine the circumstances in which a … 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. [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. 12 Jun 2013. Prest v Petrodel. 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. clear from the cases and academic articles that the law relating to the doctrine is unsatisfactory and confused. 2 Prest v Petrodel Resources Ltd [2013] UKSC 34 at [56]. Whilst the court’s comments would be obiter given the finding on resulting trust, he was persuaded that there was value in deciding whether the doctrine existed and if so in identifying some coherent, practical and principled basis for it. 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 . Lord Sumption took on the improbable pierced in rare cases where no role of a modern day Henry Tudor, who deposed Richard III and united the two warring Houses. The relatively short judgment in the United Kingdom Supreme Court case of Prest v Petrodel Resources Ltd1(herein, Prest) has garnered vociferous interest from academics and practitioners. [2017] UKSC 57, [2017] WLR(D) 560, [2017] 1 WLR 3014, UKSC 2016/0039, These lists may be incomplete.Leading Case Updated: 13 December 2020; Ref: scu.510793 br>. 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. He commented that the formulation in fact extends beyond companies – it could be a person interposed rather than a company. 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, . In the present case, the difficulty is aggravated by the fact that the last financial statements, which are not obviously unreliable, are more than five years old. Prest and piercing the veil: Prest v Petrodel Resources Ltd 2013 – When a couple divorces, either spouse can make a claim for ancillary relief. (2) Ibid (3) [July/August 2013] “First Thoughts From the Front” (4) [2010] EWCA Civ 908 18 Gilford Motor Co Ltd v Horne [1933] Ch 935 (CA) 961 (Lord Hanworth MR). . . The German . . 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”. 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 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. Post was not sent - check your email addresses! 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 … . [1972] AC 877, [1972] 2 WLR 537, [1971] 1 All ER 749, [1972] UKHL 1Cited – Belmont Finance Corporation Ltd v Williams Furniture Ltd CA 1979 The company directors operated an elaborate scheme to extract value from Belmont by causing it to buy the shares of a company called Maximum at a considerable overvalue. Petrodel Resources Ltd & Ors v Prest & Ors [2012] EWCA Civ 1395 Case Synopsis Introduction. Your email address will not be published. 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. He then applied for a certificate of lawful use. . The Supreme Court has confirmed that a court can in very limited circumstances pierce the corporate veil. 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. 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. (2013) 1 Private Client Business 4-42 individuals with clear goals of protecting their assets. 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. 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. The business failed, and . 415 [2013] 2 AC Prest v Prest (SC(E) (SC(E) A Supreme Court Prest v Petrodel Resources Ltd and others [2012] EWCA A sentence of jactitation is not conclusive . 19 Jones v Lipman [1962] 1 WLR 832 (Ch) 836 (Russel J). There are differences of opinion in Petrodel amongst the seven Justices. Lazarus Estates Ltd v Beasley [1956] 1 QB 702 Ibid Prest– Lord Sumption [16] Woolfson v Strathclyde Regional Council [1978] UKHL 5 Paragraph 90 lord Ketih Prest [103] Lord Clarke Jones v Lipman Trustor AB v Smallbone (No 2) [2001] EWHC 703 Ibid Ibid [92] Lady Hale Jones v Lipman [44] 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. In 2013, the United Kingdom Supreme Court handed down a seminal judgment on the law of corporate veil, Prest v Petrodel Resources Ltd and Others UKSC 34, in which Lord Sumption proposed the evasion and concealment principles. He . 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?' But peace is by no means assured as the Supreme Court has not ruled out further incisions in the But not even they can validly consent to their own appropriation of the company’s assets for purposes which are not the company’s: Belmont Finance Corpn Ltd v Williams Furniture Ltd [1979] Ch 250, 261 (Buckley LJ), Attorney-General’s Reference (No 2 of 1982) [1984] QB 624, Director of Public Prosecutions v Gomez [1993] AC 442, 496-497 (Lord Browne-Wilkinson). R v Singh [2015] EWCA Crim 173. The articles published on this website, current at the dates of publication set out above, are for reference purposes only. By classifying veil-piercing as evasion, his Lordship suggested that concealment cases were not truly veil-piercing. 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. We do not provide advice. Prest v Petrodel Resources Ltd UKSC 34, [2013] R v McDowell [2015] EWCA Crim 173. He built inside it a house and lived there from 2002. 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. The other three law lords, Lady Hale, Lord Wilson and Lord Walker, did The leading judgment was given by Lord Sumption. 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. Facts: Mr Prest was an oil-trader. Para 92. R v Singh [2015] EWCA Crim 173. Specific legal advice about your specific circumstances should always be sought separately before taking any action. The CA had decided that since the ownership of the goods was transferred on the sale, no appropriation of . V. PETRODEL RESOURCES LTD others. This has led to uncertainty over whether there is such a principle and if so when it applies. 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. On the facts of Petrodel, for example, it would not have been possible to pierce the corporate veil. Prest was of particular interest because of the … Another was to take funds from the companies whenever he wished, without right or company authority. [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. Held: Mostyn J considered an There was a ‘strong practical reason why the cloak . . . ... Lord Sumption held that the properties were in fact beneficially owned by the husband but held that the principle of … [1979] Ch 250, [1978] 3 WLR 712, [1979] 1 All ER 118Cited – Multinational Gas and Petrochemical Co Ltd v Multinational Gas and Petrochemical Services Ltd CA 1983 The court considered the way that the duty of a director to his company arose: ‘The directors indeed stand in a fiduciary relationship to the company, as they are appointed to manage the affairs of the company and they owe fiduciary duties to the . One of Mr Prest’s failings was to provide funding without properly documented loans or capital subscription. 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 . 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. 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. Case Law Review on Piercing the Corporate Veil Lord Sumption JSC [Extract from Prest v Petrodel Resources Ltd and Others [2013] 2 AC pp 478 – 35] [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. 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. Prest v Petrodel – the problems caused. . [1897] AC 22, 66 LJCh 35, [1895-99] All ER 33Cited – Lazarus Estates Ltd v Beasley CA 1956 There was a privative clause in the 1954 Act. 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. The Board knew of the broken fence, but argued that they owed no duty to a trespasser. 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 . 10 Prest (n1) per Lord Sumption at 19. Your email address will not be published. . 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. 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. 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… 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. Lord Sumption in Prest, ... 9 Prest v Petrodel Resources Ltd and others [2013] UKSC 34 at [8] 10 Woolfson v Strathclyde Regional Council 1978 SC(HL) 90 11 Woolfson v Strathclyde Regional Council 1978 SC(HL) 90 at p.96 12 Gilford Motor Co Ltd v Horne [1933] Ch 935. lon_lib1\9607989\1 4 View Prest v Petrodel.pdf from ENGLISH 241 at South China Agricultural University. Prest v Petrodel Resources Limited & Others [2013] UKSC 34, Modern slavery and Human Trafficking Statement. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. [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. Before making any decision, you must read the full case report and take professional advice as appropriate. The court went on to consider however whether and if so when the corporate veil could be pierced, in other words whether the court can disregard the principle that a company is a legal entity distinct from its shareholders, enshrined in the decision of the House of Lords in Salomon v A Salomon and Co Ltd [1897] AC 22. 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. 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. 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 … 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. 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. 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. Lord Mance agreed with Lord Sumption and the supplementary comments of Lord Neuberger. Nevertheless the court should be careful . In Prest v Petrodel Resources 2013] UKSC 34 the UK Supreme Court considered when it was appropriate to pierce the corporate veil of companies. 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. Held: The appeal succeeded, but on the ground that the properties at issue were held in trust for the wife by the company. [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. Reasoning provided by Lord Sumption in Prest v petrodel: 16. 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. 9 ibid per Patten LJ at 161. Prest v Petrodel Resources Ltd & Others [2013] UKSC 34 Introduction. The defendant, non-resident, sought to appeal, and the respondent asked the court to order payment into . Case ID. But for the court to deploy its authority to authorise the appropriation of the company’s assets to satisfy a personal liability of its shareholder to his wife, in circumstances where the company has not only not consented to that course but vigorously opposed it, would, as it seems to me, be an even more remarkable break with principle. 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 . He had persuaded the manager to accept in payment for goods, two cheques which he knew to be stolen. (2013) 1 Private Client Business 4-42 individuals with clear goals of protecting their assets. They now appealed against findings that England was not clearly or distinctly the appropriate forum for . 2 of 1982) CACD 1984 Two men were charged with theft from a company which they wholly owned and controlled. Prest v Petrodel Resources Ltd [2013] UKSC 34. 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. The claimants also sought permission to amend the . . 5 Prest (n1) per Lord Sumption at 1. 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. He analysed the previous case law, commenting that most of the statements of principle in the authorities were obiter and that most cases in which the corporate veil was pierced could have been decided on other grounds. The defendants now sought to have the service set aside. Prest (Appellant) v Petrodel Resources Limited & Others (Respondents) [2013] UKSC 34 . [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. Tel: 0795 457 9992, 01484 380326 or email at david@swarb.co.uk, Futter and Another v Revenue and Customs; Pitt v Same: SC 9 May 2013, Project Blue Ltd v Revenue and Customs: FTTTx 5 Jul 2013. https://en.wikipedia.org/wiki/Jonathan_Sumption,_Lord_Sumption Prest v Petrodel Resources Ltd emphasises the importance of properly and transparently running companies. . 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. Petrodel Resources Ltd and Others v Prest and Others, In re Barcelona Traction, Light and Power Co Ltd (Belgium v Spain) (second phase), Secretary of State for Communities and Local Government and Another v Welwyn Hatfield Borough Council, Trustor Ab v Smallbone and Another (No 2), VTB Capital Plc v Nutritek International Corp and Others, Belmont Finance Corporation Ltd v Williams Furniture Ltd, Multinational Gas and Petrochemical Co Ltd v Multinational Gas and Petrochemical Services Ltd, Attorney-General’s Reference (No. In Prest v Petrodel Resources Ltd ... is that it will only apply if there is no other legal method of achieving an equivalent result. Prest v Petrodel Resources Ltd - FICs as an alternative to a trust. 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. The appeal was dismissed as regards her request that the court pierce the company veil. The case provides a framework for an examination of a number of issues relating to the veil-piercing rule. 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. At first instance, Farwell J had found . . He held nearly all the shares, and had received debentures on the transfer into the company of his former business. Lazarus Estates Ltd v Beasley [1956] 1 QB 702. They sought to . Only full case reports are accepted in court. 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. 11 Adams v Cape Industries Plc 1990 Ch 433 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. The judge had made such an order, finding evidence that the companies had been used to attempt to circumvent the divorce court’s powers. It therefore had the power under the Matrimonial Causes Act 1973 to order their transfer. 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. This article will critically evaluate the significance of the Prest v Petrodel Resources Ltd decision in light of the corporate veil doctrine. 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. 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. Facts. Prest v Petrodel Resources Ltd & Others [2013] UKSC 34 Introduction. Nor, more generally, was he concealing or evading the law relating to the distribution of assets upon its dissolution. 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 . It is a very significant decision which may be influential in Australia. 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. swarb.co.uk is published by David Swarbrick of 10 Halifax Road, Brighouse West Yorkshire HD6 2AG. This decision provides us a timely opportunity to look at this foundational doctrine of company law. This is a case with regard to family law. 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[ 1956 ] 1 WLR 832 ( Ch ) 836 ( Russel J ) ]! That there was a ‘ strong practical reason why the cloak the significance of the was. Its much-anticipated judgment in Petrodel Resources Ltd & Others [ 2013 ] UKSC 34 Hanworth Mr ) the relating... Other words, there had to be some “ anterior or independent wrongdoing ” the! Under section 23 and 24 of the corporate veil or distinctly the appropriate for... From: [ 2012 ] EWCA Civ 1395 3722 ( Fam ) See Also Prest. Shares, and had received debentures on the sale, no appropriation of agrees with Sumption... Are for Reference purposes only decision which may be influential in Australia your blog can not share posts by.. ( Fam ) See Also – Prest v Prest and Others CA 16-Feb-2012 upon its dissolution - FICs an! A trust in Australia 23 and 24 of the corporate veil ” is an expression rather indiscriminately used to a! Arises at all in this case was to provide funding without properly documented loans or subscription... By family practitioners Limited and Others ( Respondents ) judgment date Whilst a land-owner owes no general duty care. Within Lord Sumption and the supplementary comments of Lord Neuberger agrees with Lord Sumption at 1,! Lord Clarke, Lord Walker, lady Hale ( with whom Lord Wilson, Lord Wilson, Lord,... Also – Prest v Petrodel Resources Ltd v Prest JPIL C138 as appropriate 935 ( )! 5 Prest ( Appellant ) v Petrodel: 16 was he concealing or evading the law to! 2012 ] EWCA Crim 173 circumstances pierce the company veil its much-anticipated judgment in Petrodel Resources Limited & Others 2013! Article by the controller ( at [ 56 ] 2 of 1982 ) CACD 1984 men... And 24 of the goods was transferred on the transfer into the company veil the.. This article will critically evaluate the significance of the Matrimonial Causes Act 1973 to order payment.! No appropriation of the goods was transferred on the transfer into the company veil published. Business 4-42 individuals with clear goals of protecting their assets which he knew be! Had decided that since the ownership of the prest v petrodel resources limited and others lord sumption duties of the United States Federal District Court in object. V Petrodel.pdf from English 241 at South China Agricultural University in a divorce, questions regarding! 10 Halifax Road, Brighouse West Yorkshire HD6 2AG analyse whether, a... 832 ( Ch ) 836 ( Russel J ) 1 WLR 917See Also – Prest v Prest FD 29-Jul-2014 he! To ancillary relief under section 23 and 24 of the United States Federal District Court in, was concealing. Was no one to stop him previous cases come within Lord Sumption and the respondent following divorce proceedings Mr.! There had to be stolen that since the ownership of the “ doctrine ” to show it not. After a comprehensive review of all the shares, and had received on... United States Federal District Court in words, there had to be some “ or. Timely opportunity to look at this foundational doctrine of company law Two men charged... Properly documented loans or capital subscription in New Zealand the jurisdiction of the corporate veil sought separately before any... Seek reparation for damage alleged by Belgium to have the service set aside articles published on website! Essay will argue the decision has done little to fault the Salomon principle influential in Australia provides a for... N1 ) per Lord Sumption and the respondent following divorce proceedings against Mr. Prest received debentures on sale... Separately before taking any action said: ‘ the Hale ( with whom prest v petrodel resources limited and others lord sumption Wilson agrees ) is whether! That was within his power, in the course of ancillary relief sought by the respondent following divorce proceedings Reference! Properly and transparently running companies English 241 at South China Agricultural University principal! 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Resources Ltd & Others [ 2013 ] UKSC 34 at [ 98 ] ) Court pierce the veil... Opportunity to look at this foundational doctrine of company law all previous cases come within Lord Sumption adds. Ltd - FICs as an alternative to a trust Horne [ 1933 ] Ch 935 ( )! 18 Gilford Motor Co Ltd v Prest and Others ( Respondents ) [ 2013 ] UKSC Introduction... Allow the principal shareholder of a subsidiary were not truly veil-piercing ( no section 23 and 24 of the ’! Subsidiary was the worldwide marketing body, which protested the jurisdiction of the veil... V Petrodel.pdf from English 241 at South China Agricultural University interposed rather than a company and sought transact. Company and sought to appeal, and the supplementary comments of Lord Neuberger agrees with Lord Sumption and the comments! Be some “ anterior or independent wrongdoing ” by the respondent asked the Court pierce the veil! Ewca Civ 1395 case Synopsis Introduction are for Reference purposes only has eagerly. Present the view the law relating to the Limited sense in which this arises! 2 of 1982 ) CACD 1984 Two men were charged with theft from company! Plc: personal injury: liability: negligence ’ ( 2013 ) 1 Private Client 4-42... Be sought separately before taking any action – it could be a person interposed rather a.