Offshore under scrutiny Bryon W Moore
The Supreme Court decision awarded £17.5m of property assets to Yasmin Prest, the ex-wife of prosperous oil trader Michael Prest. Mr Prest had argued that the assets, which were stored in three offshore corporate accounts, were actually separate legal entities and belonged to the company. However, the court ruled otherwise and ordered the settlement to Mrs Prest, claiming that rich husbands cannot get away with deceit.
Cheat's charter limited
Commenting on the case, Robin Charrot, a family partner at law firm Mills & Reeves said that the ruling would ‘severely limit the availability of this so-called ‘cheat’s charter.’ However, he added: 'It is important to note that the reason used for the ruling was not the same as that used by the original trial judge. The Supreme Court specifically stated that they were not piercing the corporate veil, and that family courts cannot simply give company assets to wives just because the sole owner and controller of the company is the husband.'
Funds for purchase
He said that the justification for the Supreme Court's decision 'was that the husband, and not the companies, had originally provided the funds for the properties to be bought. So, applying trusts law principles, the companies held the properties in trust for him, he was 'entitled' to them, and therefore the court could transfer them to the wife. In this respect, the husband and the companies have got their comeuppance, because although there was no conclusive evidence of him providing the funds, the court said it could draw that conclusion where the husband and the companies had been deliberately obstructive.'
'This is the result that most people will believe to be the fair outcome - giving the divorcee the share of assets they are owed, Mr Charrot added.
Sarosh Zaiwalla, Senior Partner at Zaiwalla & Co Solicitors, described the landmark decision as a triumph of the principle ‘law is for justice’.
'It is a ground-breaking judgment in more ways than one and also gives recognition to the current mood of the majority of the population which is against those taking the cover of offshore companies to avoid their liability,' he said.