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Family Law

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12 DEC 2013

FINANCIAL REMEDIES: W v H [2013] EWHC 3755 (Fam)

(Family Division, Parker J, 29 November 2013)

The husband and wife were married for 25 years. The husband had three children including IB. The husband owned the majority of shares in a company and minority shareholdings were owned by the wife and IB. Prior to the sale of the company the minority shareholdings were transferred from the wife and IB to the husband. Following that a number of cash transfers were made by the husband to IB. When the wife petitioned for divorce she applied to set aside the transfers under s 37 of the Matrimonial Causes Act 1973 in order to satisfy her claim for financial remedies.

An ex parte freezing order over the husband's assets was obtained and IB was joined as a respondent to the proceedings. However, during the proceedings the husband became ill and was unable to provide instructions to his legal advisors. The Official Solicitor became involved. The district judge set aside just one of the transfers and dismissed the application in relation to the other transfers. IB applied to the High Court and the order was set aside.

The wife thereafter applied under s 423 of the Insolvency Act 1986 for an order to restore the husband's financial position and for an order waiving compliance with various procedural requirements. The husband died before the hearing took place.

The parties agreed that the right to pursue an application to judgment did not exist beyond their joint lives and there was no longer jurisdiction under s 37 of the 1973 Act. The husband made no provision for the wife in his will. The wife, therefore, sought to replace her application under s 423 of the 1986 Act with an application under s 10 of the Inheritance (Provision for Family and Dependants) Act 1975

The wife could still be assisted by s 423 of the 1986 Act. It did not require formal insolvency, merely the existence of a debt. The husband or his estate in this case could be characterised as the debtor and the wife as a victim of the transaction. The test under that section was wider than that of s 10 of the 1975 Act and the remedy was different. The wife was thus far unable to make a claim under the 1975 Act as probate had not been granted. The application under s 423 of the 1986 Act would not be dismissed because in the absence of a freezing order prior to the wife's claim, dissipation might take place. This application would be made in support of an application under the 1975 Act. Injunctive relief would be required prior to the wife's issue of claim.


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