The Court of Appeal has recently reached a decision in the above case involving financial remedy proceedings in the High Court. Lord Justice Thorpe noted that Mr Prest had “failed.. comprehensively to comply with his obligation to provide full and frank disclosure” of his assets. The Court had concluded after drawing adverse inferences as a result of his failure to provide proper disclosure that he had assets worth in the region of £37.5 million and that Mrs Prest should be awarded £17.5 million. The majority of Mr Prest’s wealth was however held in various companies (the husband worked in international oil development and trading). The key issue in the case was who owned the properties, the husband or the companies? The Court can only order in financial remedy proceedings that a party to a marriage should transfer property, being property to which that party is entitled either in possession or reversion. To constitute property to which that party is entitled they have to be the beneficial owner of the property.
The husband had been ordered to transfer to the wife the London properties together with three properties abroad and the shares in a company abroad. Following transfer of the properties they were to be sold and the net proceeds of sale used to pay the lump sum due to the wife.
The evidence produced showed that Mr Prest was in fact the same as the companies. Although there were other directors they were viewed as inconsequential and under the control of Mr Prest who drew monies from the companies for anything he so chose including school fees, family holidays and various other family expenditure without asking or reporting to the other directors.
The companies appealed stating that the family courts did not have the power to order the transfer of the properties claiming that the company was a separate legal entity and did not constitute property to which the husband was entitled.
Lord Justice Rimmer found that Mr Prest was not entitled to the properties which he found were assets of the company and to order a transfer of such property would be contrary to the well founded principles of company law. The Court stated that a transfer could only take place if there was found to be impropriety. In this case the husband had not transferred properties to the company to defeat the wife’s claim and therefore the Court had no power to make the order.
Mrs Prest currently intends to appeal to the Supreme Court.
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