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Continue readingThe decision of the Supreme Court in the case of Michael and Yasmin Prest (released on 12 June 2013) sends a serious warning to anyone in divorce proceedings who is trying to present a misleadingly low picture about the true extent of their wealth.
It is by no means uncommon in financial proceedings within a divorce, for the financially stronger person to employ various devices to try to appear less wealthy.In this regard Michael Prest (a wealthy oil trader) was no exception.
Mr Prest argued, amongst other things, that seven properties where the legal title was held in the names of companies run by him, were not his assets,they were company assets.The Supreme Court dismissed this argument on the basis that the properties were held on trust for Mr Prest by the companies.Hence, the titles of these properties could be transferred into the name of his wife as part of her divorce settlement.
Divorce lawyers, particularly those who specialize in acting for wealthy divorcing couples, will find the case significant because of the clear message given by the Supreme Court that judges will give short shrift to a spouse’s ill disguised attempt to use (or should one say misuse) company law to put assets beyond the reach of their husband/wife.
However it must also be remembered that this case turned on very specific facts: Michael Prest had sole control over the company assets, there were no shareholders whose interests needed to be taken into account by the Supreme Court.
Whilst this case is a triumph for fairness, it does not follow that company assets will always be transferable in matrimonial proceedings.
Bik WongHubbardPegman and Whitney LLP12.6.2013