Thursday, 6 June 2013

UK: The company's separate legal personality - Supreme Court to give Petrodel judgment next week

The Supreme Court has announced that it will hand down its judgment in Petrodel Resources Limited v Prest next week: see here.

The issue for the court, as outlined in its case summary, was: is it open to the court in ancillary relief proceedings to treat the assets of a company of which a spouse is the sole controller as being assets to which that spouse is ‘entitled’ for the purposes of section 24(1)(a) of the Matrimonial Causes Act 1973. In the Court of Appeal the majority (Rimer and Patten LJJ; Thorpe LJ dissenting) provided a strong endorsement of the company's separate legal personality: see [2012] EWCA Civ 1395. Rimer LJ stated: "... the separate corporate identity of a company is a fact of legal life that all courts are required to recognise and respect, whatever jurisdiction they are exercising" (para. [155]). Patten LJ stated that section 24(1)(a) did not give the court the power to disapply the established principles of legal and beneficial ownership or of company law (para. [160]).

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