Posted by & filed under Blog.

On a divorce a court can look at all the assets owned by the parties to the marriage.

Amongst other types of order, a court can order one party to transfer an asset he or she owns to the other party. Sometimes what are owned are shares in a company and the company itself owns assets, for example, properties.

In the past, courts have been fairly robust at looking at the reality of the situation when making orders. For example, if the husband is the sole shareholder ( that is the sole owner of a company) and is used to treating the assets of the company as his own, family courts have felt able to make orders directly against the company property in favour of the other party.

In a recent case Moylan J decided that assets held by companies, where the husband was the sole owner, were effectively his property and ordered the husband to transfer to the wife certain properties held by the companies.

However, the decision was appealed and the appeal court decided that this approach by the family courts was wrong as it disregarded the very long established legal principle that a company was a separate legal personality from its shareholders so that the court did not have this power in a divorce so the earlier court decision was wrong.

The case is now being appealed to the Supreme Court so watch this space.

Comments are closed.