Saturday, October 27, 2012

Oil tycoon who used African law to fight £17million divorce wins landmark case to slash payout to wife by £9million

Oil tycoon Michael Prest has won his lengthy legal battle to cut his ex-wife's payout
Oil tycoon Michael Prest has won his lengthy legal battle to cut his ex-wife's payout

An oil tycoon who used African law to attempt to strip his ex-wife of a £17.5million divorce payout has won a landmark case to slash the money by £9million.

Multi-millionaire Michael Prest, 50, one of Britain's most successful black businessman, originally claimed under 'native' African law his oil company didn't belong to him. And despite being slammed for his 'ingenious and dishonest' attempts to conceal his huge wealth from the divorce courts, he has won his marathon legal fight.

One of the country’s top family judges said that 'there were almost no lengths to which he was not prepared to go' in his fight to cut down his 49-year-old ex-wife Yasmin’s divorce settlement. Although she insisted he was worth 'tens if not hundreds of millions of pounds' and asked for an award of £30.4 million, he was adamant he was worse than penniless, with net debts of £48 million, and said his ex was entitled to only just over £2 million.

Costly divorce: Yasmin Prest outside London's Appeal Court in an earlier court appearance
Costly divorce: Yasmin Prest outside London's Appeal Court in an earlier court appearance

After a marathon dispute that ran up 'astronomical' legal costs of more than £3 million - and during which Mr Prest 'repeatedly flouted' his duty to fully and frankly disclose his assets - he was last year ordered to give his ex-wife money and assets worth £17.5 million. However, in a ruling today that award was cut by up to £9 million by the Court of Appeal.

In a majority decision - which exposed a gaping rift between family and commercial lawyers - the court ruled the divorce judge had been wrong to 'pierce the corporate veil' and award Mrs Prest six London properties owned by companies that her ex-husband was said to control. Family law specialist, Lord Justice Thorpe, said: 'Once the marriage broke down, the husband resorted to an array of strategies, of varying degrees of ingenuity and dishonesty, in order to deprive his wife of her accustomed affluence. 'Amongst them is the invocation of company law measures in an endeavour to achieve his irresponsible and selfish ends. If the law permits him so to do it defeats the Family Division judge’s overriding duty to achieve fairness'.

However, his powerful dissenting judgment was overruled by Lord Justice Rimer, who said the divorce judge had simply been 'wrong' to equate the companies that owned the properties with Mr Prest and to regard their assets as his. Even though Mr Prest had been found to be in control of the companies, the divorce judge simply had no power to find that he was personally entitled to the properties they owned or to pierce the corporate veil and award them to his ex-wife.

Lord Justice Patten, who had the casting vote, agreed the appeal - which was brought by three companies that own a portfolio of flats and houses in London worth £9m - should be allowed. Issuing a resounding warning to wealthy couples, the judge said that those tempted to transfer assets to companies for wealth protection or tax avoidance purposes 'cannot ignore the legal consequences of their actions in less happy times'. The highly educated couple married in 1993 and had four children, now all teenagers, and enjoyed an 'extravagant lifestyle' until their split in 2008.

Mr Prest told the divorce judge he needed £800,000-a-year to live on and his ex said she required £730,000-a-year to keep herself and the children in the style to which they were accustomed. Despite his claims that he was £48m in debt, Mr Justice Moylan found last year that Mr Prest was worth ' least £37.5m' and had been treating the court proceedings 'as a game' to defeat or minimise his ex-wife entitlements. Mr Prest, who was named as one of the three most influential black men in Britain in 2007, was also ordered to pay maintenance of £24,000-a-year for each of his four children, along with their private school fees and medical bills.

Lawyers for the three companies that bought the appeal insisted that their assets did not belong to Mr Prest but are 'held in trust' for his children and the children of his four siblings in Africa, under Nigerian Itsekiri customary law. Mr Prest, the court heard, received a gift of £10,000 'seed money' from his Nigerian father before he died in 1992, and he used that cash as the foundation stone on which he built his oil and property empire.

Under customary law in Nigeria, his father’s death left Mr Prest as head of his family, with a responsibility to use his late father’s money to look after his siblings and their children, his legal team argued. However Mrs Prest’s lawyers have always insisted that the companies, and the assets they hold, are '100% owned and controlled' by her ex-husband and that they are effectively his 'alter ego.'

Daily Mail UK

Please share

No comments:

Post a Comment