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Jo Edwards, Resolution’s Vice Chair: Petrodel v Prest

Sep 29, 2018, 21:08 PM
The Supreme Court has unanimously allowed the appeal by Yasmin Prest and declared that property owned by the husband's companies are held on a resulting trust.
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Date : Jun 12, 2013, 05:25 AM
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This landmark ruling provides some degree of clarity into the often-debated points around the corporate veil, although the devil is, as always, in the detail.
 
Although they have upheld the original High Court ruling, in the judgments offered, the Supreme Court has effectively said that any spouse with significant wealth can tie up their assets in a business to protect themselves in the event of marital breakdown. This could give the economically powerful even more power during the divorce process and lead to greater financial imbalance in many post-separation outcomes.
 
On the other hand, the Supreme Court has upheld the rule of law, providing some certainty in relation to company law structures and how they interact with family law issues.
 
There are therefore potentially far-reaching implications for family law, and Resolution will be providing training for our members over the coming months to explore these implications in more detail.
 
It is also worth noting that the couple have four children under 17, a fact which has often been overlooked in coverage of the case. Whether you're dealing with assets of £37m, £37,000, or no assets at all, it's vital to ensure that the emotional and financial needs of the children come first. That's the approach Resolution's members take, it is enshrined in our Code of Practice, and whatever the impact of this judgment, something they will continue to advocate to their clients.
 
It is therefore encouraging - and perhaps surprising - to note that the Supreme Court has been able to uphold the justice of the case by making findings of fact in Mrs Prest's favour, enabling her to enforce the orders originally made by Mr Justice Moylan.

Jo Edwards is a Partner, Collaborative Lawyer and Mediator at Manches LLP and is qualified to undertake direct consultation with children. She is Vice Chair at Resolution and Chair, Resolution ADR committee at Resolution.

The views expressed by contributing authors are not necessarily those of Family Law or Jordan Publishing and should not be considered as legal advice.

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