James Campbell
Partner | Legal
Jersey
Partner
Jersey
Big things are happening at Ogier. Change is embedded in everything we do. It is redefining our talent, our ways of working, our platforms of delivery, our culture.
Services
We have the expertise to handle the most demanding transactions. Our commercial understanding and experience of working with leading financial institutions, professional advisers and regulatory bodies means we add real value to clients’ businesses.
Sectors
Our sector approach relies on smart collaboration between teams who have a deep understanding of related businesses and industry dynamics. The specific combination of our highly informed experts helps our clients to see around corners.
We have the expertise to handle the most demanding transactions. Our commercial understanding and experience of working with leading financial institutions, professional advisers and regulatory bodies means we add real value to clients’ businesses.
Legal
Corporate and Fiduciary
Consulting
Banking and Finance
Corporate
Dispute Resolution
Employment law
Intellectual Property
Investment Funds
Listing services
Local Legal Services
Private Wealth
Property law
Regulatory
Restructuring and Insolvency
Tax
Banking and Finance overview
Asset Finance
CAYLUX Fund Finance
Debt Capital Markets
Derivatives
Fund Finance
Islamic Finance
Leveraged Finance
Listing services
Real Estate Finance
Regulatory
Restructuring and Insolvency
Structured Finance
Sustainable Finance
Corporate overview
Economic Substance
EIIS Services in Ireland
Equity Capital Markets
Insurance and Reinsurance
Listing services
Mergers and Acquisitions
Private Equity
Real Estate Structuring, Acquisitions and Disposals
Regulatory
Technology and Web3
Dispute Resolution overview
Banking Disputes
Corporate and Financial Services Disputes
Crypto Disputes
Enforcement of Judgments and Awards
Fraud and Asset Tracing
Funds Disputes
Insurance Disputes
International Arbitration
Regulatory
Restructuring and Insolvency
Section 238 Shareholder Appraisal Rights
Shareholder and Valuation Disputes
Trusts Disputes and Applications
Investment Funds overview
Hedge Funds
Managers and Sponsors
Private Equity
Real Estate, Infrastructure and Energy Funds
Regulatory
Sustainable Investing and Impact Funds
Technology and Web3
Local Legal Services overview
Cayman Local Legal Services
Channel Islands Local Legal Services
Ireland Local Legal Services
Employment law
Estate Planning, Wills and Probate
Expat services
Family Office
Intellectual Property
Make your Guernsey will online
Make your Jersey lasting power of attorney online
Make your Jersey will online
Notary public services
Relocating your business
Relocating your family
Property law
Accounting and Financial Reporting Services - Ogier Global
Cayman Islands AML/CFT training - Ogier Global
Corporate Services - Ogier Global
Debt Capital Markets - Ogier Global
Fund Services - Ogier Global
Governance Services - Ogier Global
Investor Services - Ogier Global
Ogier Connect - Ogier Global
Private Wealth Services - Ogier Global
Real Estate Services - Ogier Global
Regulatory and Compliance Services - Ogier Global
Our sector approach relies on smart collaboration between teams who have a deep understanding of related businesses and industry dynamics. The specific combination of our highly informed experts helps our clients to see around corners.
Ogier provides practical advice on BVI, Cayman Islands, Guernsey, Irish, Jersey and Luxembourg law through our global network of offices across the Asian, Caribbean and European timezones. Ogier is the only firm to advise on this unique combination of laws.
Keep up to date with industry insights, analysis and reviews. Find out about the work of our expert teams and subscribe to receive our newsletters straight to your inbox.
Fresh thinking, sharper opinion.
We get straight to the point, managing complexity to get to the essentials. Our global network of offices covers every time zone.
No Content Set
Exception:
Website.Models.ViewModels.Components.General.Banners.BannerComponentVm
Insight
09 April 2009
Jersey, British Virgin Islands, Hong Kong, Guernsey
ON THIS PAGE
RELATED
This case stemmed from divorce proceedings before the English High Court in which the wife (the “Wife”) was seeking to obtain financial provision for herself.
The only relevant assets within the jurisdiction were two properties which were owned by a Jersey company (the “Company”). The shares in the Company were held as to 30% by the husband (the “Husband”) and as to 70% by a number of the Husband’s children from a previous marriage (the “Children”). The shares belonging to the Children, however, had been paid for by the Husband and effectively gifted to them by him.
At the time of this judgement the Wife had apparently broken into one of the two properties and was now being allowed to live there by the Company on condition that the Husband paid all outgoings until the divorce proceedings had been finalised.
The Wife argued that the two English properties should be regarded as being owned by the Husband’s and therefore available to form part of the financial settlement she was seeking on divorce. She put this claim on a number of different footings, the most important of which were:
(i) that the Company was simply the Husband’s alter ego and the Children held shares simply as the Husband’s nominees, so the “corporate veil” should be pierced and the Company simply looked through; and
(ii) that the English properties should be treated as having been settled into a “nuptial settlement” within the meaning of section 24(1)(c) of the United Kingdom’s Matrimonial Causes Act 1973 and that the Court should use its power to vary the terms of that settlement so as to make the properties available to the Wife as part of the divorce settlement.
Dealing first with the submission that it should simply look through the Company, the Court found that the following principles applied to any attempt to pierce a corporate veil:
(i) ownership and control of a company by an individual were not of themselves sufficient to allow the Court simply to treat the Company as if it didn’t exist;
(ii) even if no third party rights would be adversely affected, a corporate veil cannot be pierced solely because to do so would be “in the interests of justice”;
(iii) before a Court will pierce the corporate veil it must be established that some kind of impropriety had been committed which would justify doing so;
(iv) that impropriety must be linked to the use of the company concerned to conceal or avoid liability;
(v) it therefore follows that the corporate veil can only be pierced where a wrongdoer has control of the company and is using it to conceal his wrongdoing; and
(vi) it is not, however, necessary that the company in question was established for the purpose of facilitating the wrongdoing - it is possible that a company which had been incorporated for perfectly proper purposes might subsequently be used for an improper one by its controller and, if this were the case, the veil of that company could be pierced, although only in so far as it related to that particular impropriety.
Applying these principles to this case the Court found that the Wife had failed to establish that the Husband had full ownership and control of the Company. Even had she done so, however, the Court made it clear that there was no impropriety involved - the Company had been established and had acquired ownership of the English properties before the Husband had even met the Wife. The Court made it clear that the simple fact of the breakdown of a marriage could not of itself turn what had been a lawfully operated corporate vehicle into a sham.
On the second argument, the Court first examined what constitutes a “nuptial settlement” in order to determine whether one existed on the facts of the current case. It held that a nuptial settlement has two essential ingredients: firstly an intention to make continuing provision for one or both of the spouses concerned and secondly that such provision had to be made for that person or persons in their capacity as a spouse.
Here, the Court found that a nuptial settlement did exist in relation to the property in which the Wife was currently living since the Company had agreed that she should continue to reside there on condition that the Husband fund all related costs.
The Court went on to confirm that it had power to vary the terms of this settlement, but that such power was itself subject to the following considerations:
(i) the Court’s discretion to vary nuptial settlements is unfettered and, in theory, unlimited;
(ii) the objective in any such variation must be to be as fair to both parties as possible;
(iii) the settlement should be varied only to the extent necessary to do justice between the parties; and
(iv) the Court should be very slow to make any order depriving innocent third parties of any rights they may have in the property which is the subject of the settlement.
Applying the above, the Court declined to vary the settlement by varying the economic interests in the properties. It held that all that was actually in the settlement was a licence for the Wife to reside in one of the properties, although it did order that the terms of that licence be varied (requiring the Company to give the Wife six months’ notice to quit) to provide greater certainty.
This judgement is interesting both for what it has to say about the principles behind piercing the corporate veil and the identification and variation of nuptial settlements, and also as an indication that the English courts are not willing to cavalierly interfere with legitimate structures in a way that might adversely affect third-party interests in assets. It can be seen as a validation of the careful structuring of the way in which assets are held within a marriage, and should accordingly provide a measure of confidence in the integrity of their arrangements to many of the local trust industry’s clients.
James Campbell
Partner | Legal
Jersey
Partner
Jersey
Contact James
Back
Simon Davies
Partner | Legal
Guernsey
Partner
Guernsey
Contact Simon
Back
Josephine Howe
Partner | Legal
Jersey
Partner
Jersey
Contact Josephine
Back
Giorgio Subiotto
Partner | Legal
Cayman Islands
Partner
Cayman Islands
Contact Giorgio
Back
Skip Hashimoto
Managing Director | Corporate and Fiduciary
Tokyo
Managing Director
Tokyo
Contact Skip
Back
Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.
This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.
Regulatory information can be found under Legal Notice
Sign up to receive updates and newsletters from us.
Sign up
No Content Set
Exception:
Website.Models.ViewModels.Blocks.SiteBlocks.CookiePolicySiteBlockVm