Landmark ruling hands oil tycoon’s property to wife

A SUPREME Court ruling on a divorce cash fight between an oil tycoon and his estranged wife could have significant implications for couples whose marriages fail, lawyers said yesterday.

Yasmin Prest had claimed she was entitled to more than Michael Prest was offering.

Judges were told Mr Prest claimed to be worth about £48 million, but Mrs Prest said he was worth “tens if not hundreds of millions” of pounds.

She said she should get properties which were assets of companies Mr Prest controlled, and the Supreme Court – the highest court in the UK – ruled in her favour at a hearing in London yesterday.

Supreme Court justices said a number of disputed properties were “held” by Mr Prest’s companies, but were assets to which he was legally “entitled”.

They said in divorce litigation that a court could transfer property to a spouse if the other spouse was “entitled” to it.

And they ruled that properties at the centre of the Prest dispute should be transferred to Mrs Prest.

She said after the hearing that she was “delighted and relieved”.

One Supreme Court justice, Lord Sumption, said that it was not possible to give “general guidance”.

He said the question of whether assets legally vested in a company were “beneficially owned by its controller” was “fact-specific”.

But Mrs Prest’s lawyers said the Supreme Court decision was a “great result” for others in similar positions, would stop husbands hiding behind a “corporate facade” and was realistic and fair.

Other lawyers who had watched the case said the decision was “extraordinary” and “a victory for common sense”.

Alison Hawes, a specialist family lawyer at law firm Irwin Mitchell, said the ruling was a “landmark”.

“The ruling confirms that, if someone is the sole owner of a company, then if the court is satisfied that those assets are held by that company on trust for one party, they can be used as part of a divorce,” she said.

“It means that business people cannot deliberately ‘hide’ their assets in businesses and corporate structures to protect them in future in the event of a divorce.”

Michael Hutchinson, a partner at law firm Mayer Brown, said: “The Supreme Court has handed down a landmark decision in which, for the first time since at least the end of the 19th century, it has accepted a general exception to the rule against ‘piercing the corporate veil’.

“This is an extraordinary decision and the implications for corporate governance are potentially huge. Businesses and lawyers will be poring over the judgment for some time to try to understand its limits.”

Marilyn Stowe, a senior partner at Stowe Family Law, went on: “The Supreme Court’s decision is a victory for common sense.”

The Supreme Court analysed the case following hearings in the High Court and the Court of Appeal.

A High Court judge initially ordered Mr Prest to transfer properties held in the names of companies he controlled.

The Court of Appeal overruled that decision and concluded that Mr Prest did not have to hand property to Mrs Prest.

Judges had heard that Mr Prest had dual Nigerian and British nationality, and lived in Monaco, and Mrs Prest was English.

They were told that the couple – in their early 50s – married in 1993, spent most of their time in London, had properties in Nigeria and the Caribbean, and lived to a “very high standard”.

The challenge concerned the position of a number of companies belonging to the Petrodel Group which were “wholly owned and controlled” by the husband. One of the companies was the legal owner of five residential properties in the UK and another was the legal owner of two more.