A fair split, or a 'charter for cheats'? Supreme Court to rule in landmark divorce case

Terri Judd reports on a mega-rich divorce case with far-reaching repercussians for UK courts

Yasmin Prest, who will get a final answer from the courts this week

Millionaire businessmen will be able to "stick two fingers up" at judges if the highest court in the land rules against a former wife in a high-profile divorce case this week, her lawyers said yesterday.

The landmark case has pitched the family and the commercial divisions of the High Court against each other. Wednesday's hotly anticipated Supreme Court judgment is likely to have seismic repercussions, experts warn, with calls for Parliament to change the law.

The case centres on the bitterly fought divorce of an oil tycoon, Michael Prest, 51, and his ex-wife, Yasmin. The couple, who met 20 years ago in London, enjoyed the fruits of the fortune he amassed, sending their son and three daughters to public school, and alternating their time between a multimillion-pound house in London and homes in the Caribbean and Nigeria, where he was born the son of an Itsekiri chief before moving to the UK as a child.

In 2008, they separated, leading to a protracted legal row that has shaken the foundations of matrimonial law, putting it in direct conflict with commercial interests.

Central to the case is the fact that Mr Prest, who lives in Monaco, has refused to pay a £17.5m settlement to his 50-year-old ex-wife – a British-born IT consultant who, like her former husband, has dual Nigerian nationality – and that the High Court ordered the transfer of assets from his companies as part-payment.

Family lawyers insist that to find in his favour would be to create a "cheat's charter" whereby the wealthy can simply place assets in companies, thus putting them outside what is classed as personal wealth. Commercial experts, however, claim that "piercing the corporate veil" would create an impossible situation in which spouses were allowed to tread where other creditors are not.

The dilemma stems from a High Court judgment in 2011. Describing Mr Prest as a manipulative and "wholly unreliable witness", who had treated legal proceedings "as a game", Mr Justice Moylan rejected his assertion that he was heavily in debt and "conservatively" estimated his wealth at $60m or more.

Awarding Mrs Prest just under half of the fortune, the judge said that part of this payment should be made by the transfer of 14 properties in London and Nevis, owned by Mr Prest's Isle of Man-registered Petrodel group of companies.

Petrodel Resources and two other companies, which the High Court assessed were both wholly controlled by Mr Prest, took the case to the Court of Appeal and won. While the judges did not reverse the £17.5m award, they said that Mrs Prest could not claim the properties.

Lord Justice Rimer and Lord Justice Patten, judges with a Chancery Division background, said that company assets could not be seized as they were separate legal entities and the court could not simply disregard the law. Dissenting, however, Lord Justice Thorpe, a judge with a background in the Family Division, said the companies had been milked to feed the family's extravagant lifestyle, but: "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."

Reflecting the case's magnitude, the Supreme Court appointed seven justices to hear the appeal in March; their judgment is due on Wednesday. Jeremy Posnansky QC, whose company Farrer & Co is acting for Mrs Prest, said that family courts did not have the power to enforce orders and if his client won it would make it easier to compel co-operation.

But, if she lost, he added: "It will mean there is a divergence between fairness of the court award and the inability to enforce that award. It will mean people are done out of what they are entitled to and dishonest people will be able to stick two fingers up at the court. It will be anarchy."

But Sarah Ingram, solicitor for the Petrodel companies, said the alternative would require a change of law: "If a special exception needs to be made for spouses, then it is a matter for Parliament and not the courts to decide. Otherwise, the courts would effectively be sanctioning spouses on divorce to asset-strip companies, potentially resulting in insolvency and giving them priority over third-party creditors of companies."

Zoë Bloom, a family expert at Keystone Law, agreed: "If it goes against her, the only option is to change the statute, to change the Matrimonial Causes Act. We can't possibly exist with a law that is a cheat's charter."