‘shall be assumed to report to the board for issues pertaining to the management of the company, yet you shall have and employ full discretion with the way you manage all the affairs of the company insofar as your actions are for the benefit of the company and its shareholders.’
‘(1) On granting a decree of divorce … the court may make any one or more of the following orders, that is to say – (a) an order that a party to the marriage shall transfer to the other party, … such property as may be so specified, being property to which the first-mentioned party is entitled, either in possession or reversion;’
‘[it] has been involved in the oil business in what are called downstream activities, namely trade and transportation, and more recently has been involved in upstream activities, namely oil exploration and production. Accounts for the years 2005, 2007 and 2008 … show turnover of between$572 million and profits of between just under$3 million and approximately$6 million .’
‘I am satisfied that the directors of the group, including Mr Murphy, act in accordance with instructions given by or on behalf of the husband. The husband was unable in his oral evidence to provide details of any specific occasion when the directors had not acted in accordance with his instructions.’
‘208. I spent some time during the hearing, and longer since, trying to make sense of what appeared to be inconsistent themes in the husband’s evidence and seeking to identify how they might be reconciled. Ultimately I have decided that I have been seeking to impose an unduly legalistic framework onto a relatively simple factual situation, namely that the husband operates and controls the Petrodel group and its assets for the benefit of his immediate family. The wealth within the group is the family’s wealth to which the husband has unrestricted access. I am satisfied that the husband is both the effective owner and controller of the whole of the Petrodel corporate structure. In coming to this conclusion I accept the evidence of Mr Le Breton that the husband told him that he is the ultimate beneficial owner and I also accept his apposite phrase that Petrodel is the husband and the husband is Petrodel. In my judgment, the Information Memorandum as found by the wife accurately describes the husband as the owner. 209. The extent to which the companies are the husband’s nominees is demonstrated by the term in his contract … that he: “shall be assumed to report to the board for issues pertaining to the management of the company, yet you shall have and employ full discretion with the way you manage all the affairs of the company insofar as your actions are for the benefit of the company and its shareholders.” As the husband is the only effective shareholder, the husband is managing the affairs of the company solely for his benefit, hence the complete lack of any need for real board control. The husband has clearly used the companies to meet his and his family’s personal expenditure, as well as his legal costs in these proceedings, without any inhibition. The lack of proper accounting also demonstrates the lack of any board control or supervision. 210. I am also satisfied that all the assets held within the companies are effectively the husband’s property. He is able to procure their disposal as he may direct based again on his being the controller of the companies and the only beneficial owner. There are no third party interests of any relevance because the other shareholders are merely nominal with no expectation of benefiting from their shareholdings.’
‘218. Dealing first with the issue of impropriety, has the wife established that the company structure has been used to avoid or conceal liability? In my judgment the company structure in this case was set up and has been used for conventional reasons including wealth protection and the avoidance of tax. Mr Todd is right, for example, to point to the reference in the annex to the husband’s Form E to his transferring his shares in [PRNL] to the Nevis company because he was involved in litigation. However, this does not result in the company structure being used to conceal or avoid liability. It is seeking to provide a degree of protection for the wealth, which may or may not be effective depending on the nature of the rights retained by the husband. He is also right to point to the company structure effectively being the husband’s money box which he uses at will. This might be contrary to accounting or company law principles but any disregard of those principles does not, in my view, mean that the structure is being used to avoid or conceal liability. From the husband’s perspective the wealth and the corporate structure is and remains his but at the same time he is able to take advantage of the tax and other benefits of holding it within a corporate structure. 219. I also do not accept Mr Todd’s submission that the undoubted use by the husband of the corporate structure to seek to deny that the companies or their assets are his resources or are assets available to him amounts to impropriety as that word is used in the authorities. It is simply a husband giving false evidence. Accordingly, I do not consider that the wife has established impropriety in this case.’
‘193. In essence, Bodey J decided, notwithstanding the comments in [Crittenden v. Crittenden[1990] 2 FLR 361 ], that property is within the scope of section 24 if it is property to which a spouse is to be treated as being “entitled” which can include property held by a company of which a spouse effectively has complete, or perhaps more accurately a sufficient degree of, control or ownership. Although the effect is to pierce the corporate veil it is, in my view, a question of statutory interpretation. Does the power given to the court by the Matrimonial Causes Act extend to property held through a corporate or other structure to which one spouse is (in effect) entitled through the use of rights and powers available to him and her? Bodey J decided that if a party has effective control of the legal or corporate structure and, because third party interests would not be prejudiced, is also the only person effectively entitled to the benefit of the property, then that property is within the scope of section 24 as being “property to which … (that) party is entitled in possession”. … 220. In my judgment, the question I must decide is whether the relevant shares and properties are “property” to which the husband “is entitled, either in possession or reversion”. It is plain that the word “property” is extremely broad and covers all forms of property. The crucial words are, therefore, “entitled either in possession or reversion,” words which have not been the subject of any particular analysis. I agree with Mr Wagstaffe that if a lay person was asked the question whether a husband who owns a company which owns a house is entitled to the house, they would reply in the affirmative but I also agree with him that I must decide from a legal perspective whether as a matter of statutory interpretation, as applied to the facts of this case, the answer is the same. In undertaking this task, I am persuaded that I should apply [Nicholas v. Nicholas[1984] FLR 285 ] and what appears to me to be Bodey J’s reasoning in Mubarak as set out in paragraph 193 above. 221. As I have indicated, I am satisfied that the husband has complete control over the Respondent companies both in terms of their operation and in terms of their management. He is the controlling force and the directors clearly act on his instructions. They are, to use the words of Munby J from Ben Hashem, the husband’s “stooges” or “ciphers”. I could also adopt the following passage from Lord Denning MR’s judgment in Wallersteiner v. Moir[1974] 3 All ER 217 : “He was in control of them as much as any one-man company is under the control of the one man who owns all the shares and is the chairman and managing director. He controlled their every movement. Each danced to his bidding. He pulled the strings.” 222. There is no evidence that any of the directors of any of the companies acted other than in accordance with the husband’s instructions. There is good evidence provided by Mr Le Breton that the corporate structure, the whole of it, was managed as the husband directed and I remind myself, again, of the terms of the husband’s contract of employment. Payments were made for the benefit of the husband and his family without any apparent attempt to see whether the husband was entitled to such payments. I have seen no reference to any determination being made of the husband’s bonus. The husband does not know how his income and bonus were accounted for in the accounts. There is reference to director’s remuneration but the amounts are substantially less than the amounts paid to the husband or for the benefit of the family. The husband himself accepts that the structure is such that he is able to effect whatever might be required to meet his obligations under Itsekiri customary law, be it transferring shares to his siblings or otherwise. How, I ask, would the husband be able to achieve this if he is not the effective owner of the whole group and of the companies? 223. The superficial nature of the company structure and the extent of the husband’s control can be seen from his contract of employment and the other matters to which I have referred. It is also clear to me that the husband looks at things from the perspective of obligations or need. The legal structure is of secondary importance save that clearly any such structure must be capable of being used to enable his obligations and/or his needs to be met. So, for example, if the husband’s customary law obligations require him to give his siblings shares in the company, then the structure must be such as to enable him to do so. I am confident that Mr Elusogbon did tell the husband not to worry because, indeed, the structure which holds the wealth and assets can be adjusted as required, or to put it another way the wealth held within the structure is freely available to be distributed as the husband directs. It is difficult to see how this could be achieved by him unless he controls, in English law terms, both the legal and the beneficial interest in the worth. Further, if the husband not only has complete control but also is the sole effective owner, which I have found that he is, in my judgment, again in English law terms, I would see this as equating to beneficial ownership. 224. In summary, therefore, in my judgment the answer to the question of whether an asset held in the legal name of a company is property which falls within section 24(1)(a) depends on the facts of the case. It is right, of course, that as a matter of company law a shareholder only has a right of participation in accordance with the Articles of Association and has no right to any particular item of property. But, what if the shareholder is, in fact, able to procure the transfer to them of a particular item of company property, such as a matrimonial home, as a result of their control and ownership of the property and the absence of any third party interests. Am I to ignore the reality that the shareholder is able to procure the transfer to them of that property for the purposes of deciding whether it is property to which they are entitled? 225. In my judgment, it would be contrary to the purpose and intention of the legislation if I were to do so. The legislation is intended to ensure that marital wealth can be distributed by the court between the parties in a fair and just manner. In this case the husband can without inhibition acquire the properties and shares which the wife seeks because, in effect, the companies are his nominees or agents. As a result, in my judgment, the husband is “entitled” to the shares and properties held in the names of the corporate respondents because there is no impediment, including third party interests, to his enjoying the full benefit of these assets. They are held by the companies for the husband because the corporate structure is being used as a repository for the family wealth. Effectively the husband, in respect of the companies and their assets, is in the same position he would be in if he was the beneficiary of a bare trust or the companies were his nominees. There exists no legal impediment to his procuring the transfer of the assets held by the companies into his name. In the language of the cases, they are his “alter ego”. 226. I do not consider that the company law principles, relied upon in particular by Mr Wagstaffe, determine the scope of the powers given to the court under the Matrimonial Causes Act. In my view, if a party is both the effective controller and the effective owner of a company it does not strain the language of the Matrimonial Causes Act to decide that he is “entitled … in possession” to an asset held by that company such as the former matrimonial home. This interpretation accords with what was said in Nicholas. As identified in Mubarak, he is entitled to the asset in possession because he has the right and ability to procure its transfer to him for his own use. This is not to challenge the principles established by Salomon or Adams v. Cape or the other authorities referred to in the decision of Ben Hashem. It is to recognise, as was said by Slade LJ in Cape at page 536G, with my emphasis: “save in cases which turn on the wording of particular statutes, the court is not free to disregard the principles of Salomon merely because it considers that justice so requires.’ 227. As a matter of general law the companies in the Petrodel group may be separate legal entities but, in my judgment, under the Matrimonial Causes Act their assets fall within the scope of section 24 as a result of the complete nature of the husband’s control and ownership. As Mr Wagstaffe submitted, the wife can have no stronger claim than the husband’s. In this case, as a result of control and ownership, the husband is able to procure the transfer of the properties and shares into his sole name or as he may direct. The case was argued on behalf of the husband and the companies on the basis of the husband’s rights as against the company. Apart from the alleged interests of the husband’s siblings, which I have rejected, it has not been asserted that any other rights or interests would or should inhibit me from making the orders sought by the wife. 228. I also propose to deal specifically with the position of Warwick Avenue. I am satisfied that the monies used in the purchase and refurbishment of that property came from the husband. There is no evidence that he lent this money to the company, nor that he gifted it to the company. Accordingly, if it were necessary for me to decide the issue, I would decide specifically that the company holds that property on resulting trust for the husband.’
‘Either the limited company was a legal entity or it was not. If it was, the business belonged to it and not to Mr Salomon. If it was not, there was no person and no thing to be an agent at all; and it is impossible to say at the same time that there is a company and there is not.’
‘It has become the fashion to call companies of this class “one-man companies.” That is a taking nickname, but it does not help one much in the way of argument. If it is intended to convey the meaning that a company which is under the absolute control of one person is not a company legally incorporated, although the requirements of the Act of 1862 may have been complied with, it is inaccurate and misleading: if it merely means that there is a predominant partner possessing an overwhelming influence and entitled practically to the whole of the profits, there is nothing in that that I can see contrary to the true intention of the Act of 1862, or against public policy, or detrimental to the interests of creditors.’
‘… Now, no shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein.’
‘… the corporator even if he holds all the shares is not the corporation, and … neither he nor any creditor of the company has any property legal or equitable in the assets of the corporation.’ [Emphasis supplied]
‘On the facts of the instant case, the property known as Elmwood … is vested in the company which owns it, and a question arises whether, having regard to the shareholdings in the two relevant companies …, it is proper for the court to pierce the corporate veil with the effect that though the company is the legal owner of the realty the court would disregarded [sic] the corporate ownership and make an order which, in effect, is an order against the husband, the individual shareholder. Of course it is quite clear, and there is abundant authority, that where the shareholding is such that the minority interests can for practical purposes be disregarded, the court does and will pierce the corporate veil and make an order which has the same effect as an order that would be made if the property was vested in the majority shareholder. But in the instant case it is not possible to take the view that the minority interests in either company can be thus disregarded. The shareholdings … are of such a character that the minority interests are real interests and it would not be an appropriate case in which the court should exercise its power to pierce the corporate veil. That being so, as … Elmwood is vested in the company and the company’s ownership has to be respected, is it an appropriate use of the power to order a lump sum under s.23 to add to the order for a lump sum an obligation imposed upon the husband to procure the transfer by the company of the company’s property to the wife by way of sale, the purchase money being the sum ordered by way of lump sum? I am satisfied that, although I perfectly understand the reasons that led the judge to take the view that such an order, made as he thought by way of undertaking, should be made, having regard to the terms of s. 24 when read with the terms of s. 23(1)(c) [which empowers the court to order the payment of a lump sum], it is not open to the court to supplement the express powers specified in s. 23(1)(c) and s.24(1) in such a way as to exercise an inherent power, the effect of which will be to force a third party, to wit the company, to sell property vested in the company by way of sale to the petitioner. The difficulty, I feel, is that Parliament has in s. 24(1)(a) specifically limited the property that shall be the subject of a property adjustment order and has limited it to property which is property to which the first-mentioned party is entitled in possession or reversion. Clearly, no order could be made in respect of Elmwood, the company’s property, pursuant to s.24. Section 23 is in terms drafted in such a way as to limit it simply to the obligation to pay a lump sum. I am unable to hold that I can collect from s.23, when read with s. 24, any power to order, as ancillary to an order for a lump sum, an order imposing an obligation upon a respondent to procure that a third party in whom the property is beneficially vested to divest itself of that property by way of sale to a petitioning wife, whether the machinery be by exercise of the majority shareholder’s voting power or otherwise. For those reasons, though with reluctance, I take the view that there was no power to make the order that the judge made in respect of the transfer of Elmwood, whether by way of undertaking which, as I have already explained, was not an appropriate form of order, or by way of a direct order ordering the respondent to use his controlling vote in [the relevant company] to cause the sale of the company’s property to the petitioner. For those reasons I would hold that that very important feature of the judge’s order should be varied.’
‘… the case as presented in this court is presented on a significantly different basis from the case as understood by the judge. He plainly understood, as did counsel for the wife, that the husband was prepared to undertake, if the judge took the view that Elmwood should be transferred to the wife, that the husband would use his controlling interest in [the relevant company], to achieve such a transfer against payment by the wife of the sum which the husband would provide by way of lump sum payment. On that understanding it is not surprising that he made the order he did. But it is now clear that there was no authority in counsel to offer any undertaking to the court and no undertaking has been given. Therefore, it is a question whether the court has power to order the husband to transfer the property to the wife against the payment of£105,000 , the property being vested in the company and not in the husband himself. If the company was a one-man company and the alter ego of the husband, I would have no difficulty in holding that there was power to order a transfer of the property, but that is not this case. The evidence shows that the husband only has a 71% interest in the company. The remaining 29% is held by individuals who … are not nominees but business associates of the husband. … I find it quite impossible, therefore, to ignore the corporate entity of [the company]. Therefore the order the judge made cannot stand.’
‘the minority interests in the company can for practical purposes be disregarded, the court does and will pierce the corporate veil and make an order which has the same effect as an order that would be made if the property was vested in the majority shareholder’; and (ii) (per Dillon LJ): ‘if the company was a one-man company and the alter ego of the husband, I would have no difficulty in holding that there was power to order a transfer of the property, but that is not this case.’
‘The sections relied on by Mr Turner for the imposition of such a restriction are ss.24A and 37 of theMatrimonial Causes Act 1973 . Section 24A is concerned with the position where the court is considering ordering a sale of property. Subsection (1) provides: “Where the court makes under section 23 or 24 of this Act a secured periodical payments order, an order for the payment of a lump sum or a property adjustment order, then, on making that order or at any time thereafter, the court may make a further order for the sale of such property as may be specified in the order, being property in which or in the proceeds of sale of which either or both of the parties to the marriage has or have a beneficial interest, either in possession or reversion.” That wording can relate to the shares in the company, Somerton Marine Ltd, which are owned in their own right by Mr or Mrs Crittenden, but it cannot relate to the assets of Somerton Marine Ltd.’
‘… save in cases which turn on the wording of particular statutes or contracts, the court is not free to disregard the principle of Salomon v. A. Salomon & Co Ltd[1897] AC 22 merely because it considers that justice so requires.’
‘… since the company cannot pay, the shareholders who are the people financially interested should be made to pay instead. That of course is radically at odds with the whole concept of corporate personality and limited liability and the decision of the House of Lords in Salomon v. A Salomon & Co Ltd[1897] AC 22 .’
‘78. Faiza Ben Hashem v. Shayif and Another[2008] EWHC 2380 (Fam) is a judgment of Munby J that includes between paragraphs 144 and 221 a comprehensive discussion of the principles by reference to which the court may pierce the veil of incorporation. Between paragraphs 159 and 164 Munby J re-stated the principles, which he summarised as follows. First, ownership and control of a company are not themselves sufficient to justify piercing the veil. Second, the court cannot pierce the veil, even when no unconnected third party is involved, merely because it is perceived that to do so is necessary in the interests of justice. Third, the corporate veil can only be pierced when there is some impropriety. Fourth, the company’s involvement in an impropriety will not by itself justify a piercing of its veil: the impropriety “must be linked to use of the company structure to avoid or conceal liability” (a principle derived from Trustor). Fifth, it follows that if the court is to pierce the veil, it is necessary to show both control of the company by the wrongdoer and impropriety in the sense of a misuse of the company as a device or façade to conceal wrongdoing. Sixth, a company can be a façade for such purposes even though not incorporated with deceptive intent: “164 … The question is whether it is being used as a façade at the time of the relevant transaction(s). And the court will pierce the veil only so far as is necessary to provide a remedy for the particular wrong which those controlling the company have done. In other words, the fact that the court pierces the veil for one purpose does not mean that it will necessarily be pierced for all purposes.” 79. Mr Snowden accepted that summary as a correct statement of the principles save that he questioned the correctness of the final principle, as to a requirement of necessity, as he also questioned the correctness of Warren J’s like point in [Dadourian Group International Inc and Others v. Simms and Others[2006] EWHC 2973 (Ch) ]. He said that it does not follow that a piercing of the veil will be available only if there is no other remedy available against the wrongdoers for the wrong they have committed. In principle, we agree with Mr Snowden’s suggested qualification. … With that qualification, we would, however, respectfully agree with Munby J’s summary of the principles. 80. Mr Snowden also submitted, in expansion of Munby J’s fourth principle (and reliance on what Munby J said at paragraph 199) that it is not sufficient for veil piercing purposes merely to show that the company is involved in wrongdoing, for example that it is carrying out a fraud: there will be no question in such a case of the company being used as a façade. The relevant wrongdoing must be in the nature of an independent wrong that involves the fraudulent or dishonest misuse of the corporate personality of the company for the purpose of concealing the true facts. In principle, we agree with that too. …’
‘In our view the cases before and after Wallersteiner v. Moir[1974] 3 All ER 217 ,[1974] 1 WLR 991 show that the court will use its powers to pierce the corporate veil if it is necessary to achieve justice irrespective of the legal efficacy of the corporate structure under consideration. As Lord Denning MR said ([1974] 3 All ER 217 at 238,[1974] 1 WLR 991 at 1013) the companies identified were distinct legal entities and the principles of Salomon v. Salomon & Co Ltd[1897] AC 22 prima facie applied. But only prima facie. On the facts of the Wallersteiner case, the companies danced to Dr Wallersteiner’s bidding. Buckley LJ disagreed on the facts about the position of IFT, but Scarman LJ held that the evidence disclosed liability in Wallersteiner on the ground that he instigated the loan of£50,000 .’
‘… in Wallersteiner v. Moir[1974] 1 WLR 991 Buckley LJ, at p. 1027, and Scarman LJ, at p. 1032, expressly declined to tear away the corporate veil. In the Littlewoods case[1969] 1 WLR 1241 , 1255, Sachs LJ expressly disassociated himself from the suggestion that the subsidiary was not a separate legal entity and Karminiski LJ refrained from associating himself with it. We therefore think that the plaintiffs can derive little support from those dicta of Lord Denning MR.’
‘… I find it difficult to see how the application for ancillary relief in Greenv. Green[1993] 1 FLR 326 could have been said to relate to land when the husband merely owned shares in the two companies which owned land. I can well understand Connell J’s desire to find a solution so that the petitioner and her child could be provided with a home, but I do not think that the court had power in that case to order a sale of the land.’
‘… I ought to deal with a wider question canvassed by Mr Everall [counsel for the wife]. This relates to the approach to be adopted in the Family Division in cases where assets which a wife says belong in truth and reality to her husband are, or appear to be, vested in some other person, or in some corporate or trust entity. Mr Everall, referring me to Nicholas v. Nicholas[1984] FLR 285 , Green v. Green[1993] 1 FLR 326 , Purba v. Purba [2000] 1 FCR 652 and Khreino v. Khreino (No 2) (court’s power to grant injunctions) [2000] 1 FCR 80, submits that the court adopts a robust approach in such cases and does not allow itself to be, to use Thorpe LJ’s words in Khreino’s case (at 85), emasculated by over-refined or technical arguments based on strict principles of property law. I readily accept that there is much force in Mr Everall’s submission. Thus, as can be seen from Nicholas’s case (at 287, 292), where property is vested in a one-man company which is the alter ego of the husband, the Family Division will pierce the corporate veil, disregard the corporate ownership and, without requiring the company to be joined as a party, make an order which has the same effect as the order that would be made if the property was vested in the husband. Indeed, the court can and will adopt this approach even where there are minority interests involved if they are such that they can for practical purposes be disregarded. Moreover, as Thorpe LJ’s forthright observations in Purba’s case (at 654-655), and Khreino’s case (at 85), show, the court will not allow itself to be bamboozled by husbands who put their property in the names of close relations in circumstances where, taking a realistic and fair view, it is apparent that the recipient is a bare trustee and where the answer to the real question – Whose property is it? – is that it remains the husband’s property. Again, in such cases there is no need for the third party to be joined. As Purba’s case shows, where a transfer has been made post-separation to a close relative in order to defeat a wife’s claims, the court can and will act without going through the formality of joining the third party or making setting aside orders under s.37. And as Khreino’s case shows, the court can and in appropriate cases will grant Mareva injunctions against both the husband and his offshore company and the relative who holds the bearer shares in the company without requiring either the company or the relative to be joined as parties. Nothing that I say should be taken as intended to water down in any way the robustness with which the Family Division ought to deal in appropriate cases with husbands who seek to obfuscate or to hide or mask the reality behind shams, artificial devices and similar contrivances. Nor do I doubt for a moment the propriety and utility of treating as one and the same a husband and some corporate or trust structure which it is apparent is simply the alter ego or the creature of the husband. On the other hand, and as Nicholas’ case itself demonstrates, the court does not – in my judgment cannot properly – adopt this robust approach where, for example, property is held by a company in which, although the husband has a majority shareholding, the minority shareholdings are what Cumming-Bruce LJ ([1984] FLR 285 at 287) called “real interests” held by individuals who, as Dillon LJ (at 292) put it, are not nominees but business associates of the husband.’
‘Drawing all these authorities together, the precise extent of the Family Division’s power to go directly against the property of a company owned or controlled by one of the spouses appears less than clear. In both the Court of Appeal decisions disowning the power (Crittenden v. Crittenden[1990] 2 FLR 361 and Wicks v. Wicks[1999] Fam 65 ,[1998] 1 FLR 470 ) no reference was seemingly made to Nicholas v. Nicholas[1984] FLR 285 , which contained strong Court of Appeal observations that the power exists when the circumstances there specified pertain. The one reported case to which I have been referred where the veil was actually lifted (Green v. Green[1993] 1 FLR 326 ) has been disapproved by one of the judgments of the Court of Appeal in Wicks v. Wicks[1999] Fam 65 ,[1998] 1 FLR 470 , but the disapproval was not the ratio of the decision: neither were Crittenden v. Crittenden[1990] 2 FLR 361 nor Nicholas v. Nicholas[1984] FLR 285 seemingly cited to the Court of Appeal in Wicks. Further, it is quite certain that company law does not recognise any exception to the separate entity principle based simply on a spouse’s having sole ownership and control. Rationalisation of approach Ideally the Family Division and the Chancery Division should plainly apply a common approach. However, the fact remains that different considerations do frequently pertain: the company approach, on the one hand, being predominantly concerned with parties at arm’s length in a contractual or similar relationship; the family approach, on the other hand, being concerned with the distributive powers of the court as between husband and wife applying discretionary considerations to what will often be a mainly, if not entirely, family situation. I would echo the experience referred to by both Cumming-Bruce LJ and Connell J (above) as regards lifting the veil in the Family Division when it is just and necessary. In practice, especially in “big money” cases, the husband (as I will assume) will often make a concession that company/trust assets can be treated as his, whereafter the case proceeds conveniently on that basis. It is pragmatic, saves expense and usually works. Problems such as have arisen in this case are rare and anyway can be avoided where there are other assets against which the lump sum order can be enforced. The difficulty remains in defining those situations when lifting the veil is appropriate by way of enforcement following such a concession in ancillary relief proceedings. I would suggest that the Family Division can make orders directly or indirectly regarding a company’s assets where (a) the husband (as I am assuming) is the owner or controller of the company concerned and (b) where there are no adverse third parties whose position or interests would be likely to be prejudiced by such an order being made. I include as third parties those with real minority interests in the company and (where relevant on the facts) creditors and directors. The reason for my including the latter two categories will become apparent later in this judgment. I adopt the rationalisation of this offered by Mr Hunter, that it would amount merely to a short-circuiting of the full company law route, namely the declaration of a dividend to the husband comprising the company asset concerned (eg the matrimonial home) enabling him and/or the court then to transfer it onwards to the wife. It would amount to his property for the purposes of s.24 in the same sense that the law may look on that as done as ought to be done; whilst the mechanics of the order would be along the lines adopted by Connell J in Green v. Green[1993] 1 FLR 326 at 341G: “… the respondent do sell, or cause G Ltd to sell, four plots of the blue land to …”. I would add that lifting the veil is most likely to be acceptable where the asset concerned (being the property of an effectively one-man company) is the parties’ former matrimonial home, or other such asset owned by the company other than for day-to-day trading purposes.’
‘… both companies are bona fide trading companies incorporated well before the matrimonial difficulties of the husband and wife. DIL is incorporated outside the jurisdiction and the husband is not a director. It is not suggested that they are as such being used as a sham or device, albeit that their existence is very convenient to the husband. In my judgment, there do exist genuine third party rights and interests which ought to be respected, namely the interests of bona fide commercial creditors (one of them secured on the jewellery) and the position of directors who have fiduciary duties and who oppose the seizure of stock in trade. The facts of the case are far away from those of Green v. Green[1993] 1 FLR 326 which Mr Pointer asks me to follow. Applying the above proposed approach as regards lifting the corporate veil to the evidence now before me and having heard full legal argument, I come to the conclusion that this case does not fall within the necessarily circumscribed circumstances in which lifting the veil would be acceptable. However much the court may wish to assist a wife and children where a lump sum has not been paid, I am satisfied that doing so here, whensoever it may be permissible, would be a step too far in the all the circumstances. This is a conclusion strengthened by Art 1 of the first protocol [to the Convention for the Protection of Human Rights and Fundamental Freedoms] that every natural and legal person is to be entitled, subject to specified exceptions, to the peaceful possession of their possessions.’
‘… only property owned by a party to the marriage can be the subject of a property adjustment or other order under theMatrimonial Causes Act 1973 . Thus, to take a specific example, there is no power in the court … to order the transfer to the wife of the Antigua property, which is owned by HDC [a company in which the shares were held by the husband, the wife and a trust].’
‘There is a strong practical reason why the cloak should be penetrable even absent a finding of wrongdoing. In Mubarak v. Mubarak[2001] 1 FLR 673 , Bodey J pointed out that the same end of putting the underlying asset into the hands of the claimant could be achieved by going down a pure company law route rather than violating the sanctity of the corporate veil.’