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Prest -v- Petrodel Resources Ltd and Others

Prest -v- Petrodel Resources Ltd and Others

Postby dls » Fri Jan 03, 2014 1:34 pm

Prest -v- Petrodel Resources Ltd and Others - SC - 12-Jun-2013 - Lord Neuberger, President, Lord Walker, Lady Hale, Lord Mance, Lord Clarke, Lord Wilson, Lord Sumption (Bailii, [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, Bailii Summary, UKSC 2013/0004, SC Summary, SC) - Family - Company
In the course of ancillary relief proceedings in a divorce questions arose regarding company assets owned by the husband. The court was asked as to the power of the court to order the transfer of assets owned entirely in the companies' names. The judge had made an order finding evidence that the companies had been used to attempt to circumvent the divorce court's powers.
Held: The appeal succeeded, but on the ground that the properties at issue were held in trust for the wife by the company. The appeal was dismissed as regards her request that the court pierce the company veil.
The principle that the court may be justified in piercing the corporate veil if a company's separate legal personality is being abused for the purpose of some relevant wrongdoing is well established in the authorities: "there is a limited principle of English law which applies when a person is under an existing legal obligation or liability or subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control. The court may then pierce the corporate veil for the purpose, and only for the purpose, of depriving the company or its controller of the advantage that they would otherwise have obtained by the company's separate legal personality." No wider principle applied in cases under the 1973 Act.
Lord Neuberger set out what he thought of the doctrine that is open to a court, without statutory authority (or, possibly, in the absence of the intention of contracting parties), to pierce the veil of incorporation: "It is . . clear from the cases and academic articles that the law relating to the doctrine is unsatisfactory and confused. 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."
Statutes:
Matrimonial Causes Act 1973 s. 23

Cases Cited:
Nicholas -v- Nicholas CA 1984 ([1984] FLR 285)
Petrodel Resources Ltd and Others -v- Prest and Others CA 26-10-2012 (Bailii, [2012] EWCA Civ 1395, [2013] 2 FLR 576, [2013] 2 WLR 557, [2013] 1 All ER 795, [2012] 3 FCR 588, [2013] 2 Costs LO 249, [2012] WLR(D) 296, [2013] Fam Law 150) - Appeal from
The Duchess of Kingston's Case 1776 (Commonlii, [1776] EngR 16, (1776) 1 Leach 146, (1776) 168 ER 175, (1776) 2 Smith's LC, 13th ed 644)
Salomon -v- A Salomon and Company Ltd HL 16-11-1896 ([1897] AC 22, 66 LJCh 35, [1895-99] All ER 33)
Lazarus Estates Ltd -v- Beasley CA 1956 ([1956] 1 QB 702, [1956] 1 All ER 341)
In re Barcelona Traction, Light and Power Co Ltd (Belgium -v- Spain) (second phase) ICJ 5-2-1970 ([1970] ICJ Rep 3, ICJ)
Lonrho Ltd -v- Shell Petroleum Co Ltd HL 1980 ([1980] 1 WLR 627)
Puttick -v- Attorney General etc FD 1980 ([1980] Fam 1, [1981] QB 767)
Bank of Tokyo Ltd -v- Karoon (Note) 1986 ([1987] AC 45, [1986] 3 All ER 468, [1986] 3 WLR 414)
Secretary of State for Communities and Local Government and Another -v- Welwyn Hatfield Borough Council SC 6-4-2011 (Bailii, [2011] UKSC 15, Bailii Summary, SC, UKSC 2010/0036, SC Summary, [2011] PTSR 825, [2011] 15 EG 93, [2011] 2 AC 304, [2011] 2 WLR 905)
Woolfson -v- Strathclyde Regional Council HL 15-2-1978 (Bailii, [1978] UKHL 5, [1979] JPL 169, (1978) 248 EG 777, 1978 SC (HL) 90, 1978 SLT 159, (1979) 38 P & CR 521)
Adams -v- Cape Industries plc CA 2-1-1990 ([1990] Ch 433, [1991] 1 All ER 929, [1990] 2 WLR 657, [1990] BCLC 479, [1990] BCC 786)
Green -v- Green FD 1993 ([1993] 1 FLR 326)
Mubarak -v- Mubarak FD 30-11-2000 (Times 30-Nov-00, [2001] 1 FCR 193, [2001] 1 FLR 673)
Trustor Ab -v- Smallbone and Another (No 2) ChD 30-3-2001 (Times 30-Mar-01, Gazette 17-May-01, [2001] 1 WLR 1177, Bailii, [2001] EWHC 703 (Ch)) - Criticised
Kremen -v- Agrest (No 2) FD 3-12-2010 (Bailii, [2010] EWHC 3091 (Fam), [2011] 2 FLR 490, [2011] Fam Law 568)
Gilford Motor Co Ltd -v- Horne CA 1933 ([1933] All ER 109, [1933] 1 Ch 935)
A -v- A FD 29-1-2007 (Bailii, [2007] EWHC 99 (Fam), [2007] 2 FLR 467)
Ben Hashem -v- Ali Shayif and Another FD 22-9-2008 (Bailii, [2008] EWHC 2380 (Fam), [2008] Fam Law 1179, [2009] 1 FLR 115)
VTB Capital Plc -v- Nutritek International Corp and Others ChD 29-11-2011 (Bailii, [2011] EWHC 3107 (Ch))
VTB Capital Plc -v- Nutritek International Corp and Others CA 20-6-2012 (Bailii, [2012] EWCA Civ 808, [2012] WLR(D) 181, WLRD, [2012] 2 Lloyd's Rep 313, [2012] 2 CLC 431, [2012] 2 BCLC 437)
VTB Capital Plc -v- Nutritek International Corp and Others SC 6-2-2013 (UKSC 2012/0167, Bailii, [2013] UKSC 5, [2013] 2 WLR 398, WLRD, Balii Summary, [2013] WLR(D) 41, SC, SC Summ, [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 398)
Jones -v- Lipman and Another ChD 1962 ([1962] 1 WLR 832, [1962] 1 All ER 442)
Gencor ACP Ltd -v- Dalby ChD 2000 ([2000] 2 BCLC 734, Bailii, [2000] EWHC 1560 (Ch), [2000] 2 BCLC 734) - Doubted
British Railways Board -v- Herrington HL 16-2-1972 (lip, [1972] AC 877, [1972] 2 WLR 537, [1971] 1 All ER 749, Bailii, [1972] UKHL 1)
Belmont Finance Corporation Ltd -v- Williams Furniture Ltd CA 1979 ([1979] Ch 250, [1978] 3 WLR 712, [1979] 1 All ER 118)
Multinational Gas and Petrochemical Co Ltd -v- Multinational Gas and Petrochemical Services Ltd CA 1983 ([1983] Ch 258)
Attorney-General's Reference (No. 2 of 1982) CACD 1984 ([1984] QB 624, [1984] 2 WLR 447)
Regina -v- Inland Revenue Commissioners, Ex parte T C Coombs & Co HL 1991 ([1991] 2 AC 283, [1991] 2 WLR 682, [1991] 3 All ER 623)
Director of Public Prosecutions -v- Gomez HL 3-12-1992 (Gazette 03-Mar-93, Times 08-Dec-92, [1993] AC 442, Hamlyn, Bailii, [1992] UKHL 4, [1993] 1 All ER 1)
Wisniewski -v- Central Manchester Health Authority CA 1997 ([1997] PIQR 324, [1998] Lloyd’s Rep Med 223)
Atlas Maritime Co SA -v- Avalon Maritime Ltd ('the Coral Rose') (No 1) CA 1991 ([1991] 4 All ER 769, [1991] 1 WLR 917)
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