By STUART PARKER, corporate partner with Clarke Willmott LLP and a member of the Law Society of England & Wales, who can be contacted on 0845-2091423.

ON October 26, 2012 the Court of Appeal (CA) ruled that certain companies owned by an oil tycoon would not be made to hand over assets totalling £17.5million to his ex-wife.

That ruling overturned the previous High Court ruling that the sum was in fact payable by the companies.

However, the CA ruling has attracted criticism from many quarters because it allows wealthy spouses to protect their assets in divorce.

So, it was of huge interest when on June 12, 2013 the wife's legal team appealed the CA decision in the Supreme Court.

The SC has now overturned the CA decision, but in doing so they avoided destabilising the long established doctrine of company law – the principle of separate legal personality. There are many legitimate wealth planning, protection and preservation reasons why a husband and wife may choose to transfer marital or solely owned assets to corporate structures.

Where this happens prior to a marriage or when an agreement was reached during it, it is quite usual for a court to hold the husband or wife to those arrangements if the marriage ends.

The problem arises when these structures are arranged unilaterally by one of the spouses, as in the case above.

The SC decision though highlights the willingness of the court to look at the reality of a situation in order to achieve a fair outcome on divorce.

However in order to achieve that outcome the court decided that by virtue of the particular circumstances in which certain properties came to be invested in the companies, that the companies held those properties on trust for the husband.

The properties were his and did not belong to the companies concerned. They were therefore ordered to transfer those assets to the wife.

In doing this, the SC avoided piercing the corporate veil and thus maintained the established principles of company law.

The court was keen to point out that there was no evidence in this case to suggest that the husband was guilty of "impropriety" which would be the only reason why the SC would lift the corporate veil to ensure fairness.

To do so might have unfairly prejudiced the legal interests of trading companies, their creditors and minority shareholders.

Although the wife in this case won the battle and comfort can be taken that the SC wanted above all to avoid an injustice, the use of the case going forward may be restricted in that it was a very "fact specific" judgment.

Care should always be taken if assets are being transferred into a corporate structure, regardless of marital status.