Prest v Petrodel Resources Ltd
Properties held in the names of companies controlled by a husband were held on resulting trust for him, so they could be transferred to his wife on divorce.
Facts
In divorce proceedings, Mrs Prest claimed financial relief against her husband, a wealthy oil trader. Several properties in London, including the matrimonial home, were held in the names of companies controlled by Mr Prest. The judge ordered Mr Prest to transfer the properties to his wife. The companies appealed, arguing that the properties belonged to them, not to Mr Prest.
Legal principle
The Supreme Court held that the properties belonged to Mr Prest beneficially, because they were held by the companies on resulting trust for him. Lord Sumption said that the court could not pierce the corporate veil, because Mr Prest had not used the companies to evade an existing legal obligation. But on the facts, the properties had been transferred to the companies for no consideration or paid for with Mr Prest's money, and there was nothing to rebut the presumption of resulting trust. The court drew adverse inferences from the companies' failure to provide evidence.
Related cases on resulting trusts
- Re Abbott Fund Trusts [1900] 2 Ch 326
- Air Jamaica Ltd v Charlton [1999] 1 WLR 1399
- Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567
- Bennet v Bennet (1879) 10 Ch D 474
- Dyer v Dyer (1788) 2 Cox Eq 92
- Fowkes v Pascoe (1875) LR 10 Ch App 343
- Re Gillingham Bus Disaster Fund [1958] Ch 300
- Hussey v Palmer [1972] 1 WLR 1286
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