Lawyers acting for the ex-wife of an oil tycoon worth “tens, if not hundreds, of millions” have accused him of establishing a ‘cheats’ charter’ for divorcing husbands by hiding his money in companies.
Despite being ordered to pay his ex-wife, a lump sum of £17.m, multiple London properties and £270,000 a year by a judge in the High Court in 2011, Michael Prest is,reportedly, only paying her £150 a week, which amounts to less than the minimum wage.
Now in the Supreme Court, the case hinges on whether assets allegedly worth hundred of millions of pounds and held in offshore companies should be used to settle Mrs Prest’s divorce claim.
Family lawyers were stunned last year when the Court of Appeal ruled after the High Court decision that the companies were separate legal entities and that London properties held by them could not be claimed by Mrs Prest.
But lawyers for Mr Prest contend that the three Isle of Man-based companies are “not relevant as a party to the litigation” and have asked the Court to dismiss Mrs Prest’s claims.
The outcome of the case could affect London’s reputation as ‘the divorce capital of the world’, as past rulings have tended to favour the spouse with fewer assets.
It also pits family law against corporate law because the normal laws that govern divorce do not apply once the “veil of incorporation” has been drawn down, and Mrs Prest is effectively seeking leave to pierce that veil.
The veil of incorporation separates the people who own and run the company from the company itself. Therefore, if a company goes into liquidation, the assets of the company go with it, but the directors’ assets remain untouched, unless there has been misconduct or the directors have given personal guarantees.