As explained by Withers, the law firm, Michael Prest founded the Nigerian energy company, Petrodel Resources.  He separated from his wife of 15 years and in the divorce he claimed that Petrodel’s assets did not belong to him, but to a family trust, and that he was heavily in debt. His wife has ridiculed the claim, saying that he and Petrodel were one and the same entity and that she should have a multi-million pound award paid for from the Petrodel corporate structure.

The case, which made headlines in the autumn of last year, raised the use of complex structures to try and avoid divorce payouts, and the extent to which corporate structures can act as a shield in such cases.

Such cases also throw light on why the unpleasant issue of divorce is nevertheless an important wealth planning issue, especially in jurisdictions, such as England, where pre-nuptial agreements do not carry full force of law, at least not yet.

“In commercial law there is an ages-old principle that a company is independent of its shareholders and that corporate ownership, even sole ownership, will not permit piercing of the corporate veil in legal proceedings to access the company’s assets without some fraudulent or dishonest use of the company to conceal the truth,” Withers said in a comment. “In the divorce context family judges took a more flexible view, particularly where companies were owned and controlled by one spouse, there were no interested third parties and the companies funded the standard of living of the couple during the marriage,” it said.

The Court of Appeal has rejected this distinction and the Supreme Court is now being asked to rule as to whether family cases should have a special opt-out on the general law.