Company Held Assets – Not Matrimonial Assets?
The Court of Appeal has given judgment in the case of Petrodel Resources Ltd and Others v Prest and Others  EWCA Civ 1395 with a decision that many family solicitors have found disappointing.
When the case was first heard the Judge ordered the husband to transfer to his wife as part of the divorce proceedings, several properties in London. The Judge found that the London properties were 'property' to which the husband was entitled to as the assets held within the companies were effectively the husbands property.
The Court of Appeal did not share the same view as the first Judge and allowed the husbands appeal. The Court of Appeal held that the fact that the husband was nearly a 100% shareholder in the companies did not mean that the companies' property belonged to him. One judge Rimer LJ stated that it is not open to the Family Division Judges to make an order against company-held property unless there exists relevant impropriety justifying the piercing of the corporate veil.
Another judge disagreed with the ruling and Thorpe LJ stated that the Court's decision gave 'an open road and a fast car to the money maker who disapproves of the principles developed by the House of Lords that now govern the exercise of the judicial discretion in big money cases.'
This case is disappointing as it now allows one spouse to shield his shareholding (assets in a company) from becoming matrimonial assets. However this is not the last we have heard about this case as the husband has been given permission to appeal to the Supreme Court so we will see!