This week’s Supreme Court ruling in favour of the wife of an oil tycoon against the companies owned by him has set a precedent for business owners says a family law specialist at Linder Myers.
In what has been hailed as the biggest review of company law since Victorian times, the Prest v Petrodel Resources Limited case will potentially change how businesses are dealt with during divorce proceedings.
Sarah McCarthy, family law specialist at Linder Myers commented: “Previously in divorce matters, it was difficult to pursue a financial claim on behalf of one party against companies owned by the other when reviewing a fair financial settlement. The recent ruling has changed the ball game dramatically as Mrs Prest was successful in claiming a substantial settlement to be paid by the businesses owned by her husband – assets which would previously have been protected under company law.
“This is good news for the party who may have given up a career in order to raise a family while supporting their spouse’s business endeavours, particularly in cases where assets have been deliberately hidden behind companies with the intention of avoiding paying a fair settlement upon divorce.
“Although company law still protects businesses set up in the correct way, the recent ruling sends out a strong message to those who may be using their companies with the intention of hiding assets from their spouse.”
Sarah McCarthy is a collaborative law specialist and member of Resolution.