Prest v Prest overturns 30 years of family case law, says Craig Rose
On 26 October the Court of Appeal delivered judgment in Prest v Prest [2012] EWCA Civ 1395, [2012] All ER (D) 293 (Oct). Three weeks later, on 15 November, the case was noticed by the London Evening Standard. Under the headline “‘Cheats Charter’ stops ex-wives finding husbands’ hidden cash”, the paper reported calls from lawyers for “a change in divorce law to block a loophole banning ex-wives from delving into companies and trusts where they fear businessmen husbands have concealed their assets”.
This so-called loophole is, in fact, a fundamental principle of our company law, enunciated long ago by the House of Lords in their decisions in Salomon v A Salomon & Co Ltd [1897] AC 22, [1895-9] All ER Rep 33 and Macaura v Northern Assurance Co Ltd [1925] AC 619, [1925] All ER Rep 51—that a company has a legal existence separate from its shareholders even when one individual controls all of its shares, and that the shareholders have no interest in the company’s assets. In reaffirming that
