Appeal Against Landmark ‘Cheat’s Charter’ Decision
The Supreme Court, the country’s highest Court, is today being asked to make a ruling on whether divorcing couples can protect assets by citing company law.
Towards the end of last year, the Court of Appeal made a controversial landmark decision in a case between Yasmin Prest and her former husband, Michael Prest, a wealthy oil executive. The decision, branded as a ‘Cheat’s Charter’ meant that Family Court Judges were not able to make Orders against company-held property. The practical effect of the decision was that if a spouse tied up their assets within the structure of a legitimate limited company, they may avoid their financial obligations on divorce.
The family assets, which included a number of houses and other properties, were owned by Mr Prest’s companies and not by him personally. Strict company law principles were applied which stated that the husband was not ‘entitled’ to the properties held by the companies and they could not therefore be transferred to his wife.
This decision was deemed to be unfair by family lawyers and in particular for those representing the spouse of a business owner wishing to avoid their financial obligations on divorce.
The outcome of today’s appeal will decide whether commercial law trumps family law in divorce cases and whether Judges have powers to make Orders against companies’ assets.
If the Supreme Court finds for the husband, it will allow many wealthy business owners, who do not wish to cooperate with the Court process, to avoid a fair outcome. Family lawyers are eagerly awaiting the outcome of the hearing which is due to last 2 days.
If you require any further information about the issues raised, please contact Liz Hebden on 01756 700200 or [email protected]