Prest v Petrodel Resources Ltd  is an important Supreme Court decision on piercing the corporate veil.
Company law – Family law – Corporate veil – Transfer of properties – Divorce – Matrimonial proceedings – Supreme Court – Piercing the veil confirmed
The circumstances of the case of Prest v Petrodel Resources Ltd  are as follows: Mr Prest was an oil trader. He owned and controlled a number of companies that owned properties. Thus, these properties were not owned by Mr Prest himself. Later on, his marriage with Mrs Prest had been broken up. In the matrimonial proceedings, the main question concerned the transfer of the properties to Mrs Prest. This transfer required the piercing of the corporate veil.
In the court proceedings, the trial judge concluded that Mrs Prest was entitled to the properties. Therefore, the court pierced the corporate veil and order Mr Prest to transfer these properties to his wife.
Whether the court was entitled to pierce the corporate veil in the present case?
In the present case, the Supreme Court found in favour of Mrs Prest. It applied and developed the principles relating to lifting the corporate veil. The Supreme Court confirmed the power of the courts to lift the corporate veil. However, that power shall only be exercised in very limited circumstances. In particular, the Supreme Court emphasized that, in the absence of an express statutory provision, the veil will be pierced only in those rare cases when a company is being used to evade a legal obligation. In general, the Supreme Court recognised that in most cases it has not been necessary to lift the corporate veil, as alternative remedies have been available.
Applied: Salomon v Salomon & Co Ltd  A.C. 22,  11 WLUK 76; Lazarus Estates Ltd v Beasley  1 Q.B. 702,  1 WLUK 543; Ben Hashem v Ali Shayif  EWHC 2380 (Fam),  1 F.L.R. 115,  9 WLUK 355; VTB Capital Plc v Nutritek International Corp  EWCA Civ 808,  2 Lloyd’s Rep. 313,  6 WLUK 428.