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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

28 JAN 2011

Bankruptcy as a Weapon? Howard v Howard-Lawson [2011] EWHC 63 (Ch) (21 January 2011).

Mrs Justice Proudman has handed down a recent judgment that relates to a will dispute. Whilst the facts and outcome of the case have no bearing on insolvency law per se, the case does raise some interesting issues about the use of bankruptcy as a weapon. The combatants in the case are father and son. The case is Howard v Howard-Lawson [2011] EWHC 63 (Ch) (21 January 2011). The dispute revolves around an alleged forfeiture by the father in relation to a will which left a Baronetcy and Corby Castle (pictured) to him as a beneficiary if he complied with the terms of the will, in relation to, inter alia, changing his name. If he did not comply, he could not validly take, and therefore could not sell property that came within the will, namely Corby Castle.

In terms of bankruptcy as a weapon, here are the salient parts of Mrs Justice Proudman's judgment:

"This is a very sad case in that the claimant and the defendant, son and father, have fallen out in a very bitter dispute. The claimant seeks to recover what he sees as his rightful inheritance, alleging that the defendant incurred a forfeiture under the name and arms clause but that it was hidden from him by the defendant, past trustees and past lawyers. He says he only discovered the true position relatively recently when, with great difficulty, he managed to obtain access to trust files. He says if it had not been concealed from him, there would have been no need for him to enter into an Individual Voluntary Arrangement in 1993 and he would not have been adjudged bankrupt.

The defendant, on the other hand, denies that there was any forfeiture. He says that after a disentail the claimant obtained a large part of the Corby Estate which he then mismanaged with the result that the estate, including the house Corby Castle, in the family since the 17th century, has had to be sold. He alleges that the claimant will take any steps, having squandered one half of the estate, to obtain the other half, notwithstanding that some 50 years have passed since the alleged forfeiture. He also contends that the claimant is now intent on bankrupting the defendant who cannot meet his demands."

As well as featuring the familial destructiveness of  Kramer v. Kramer this case is noteworthy for raising some interesting points about the use of the bankruptcy jurisdiction as a tool of litigation, at least in the sense that bankruptcy may await the legal fee paying defendant. Sir John Howard-Lawson may not have to go down that route (for now) as Mrs Justice Proudman held, "was no forfeiture under the provisions of clause 8 of the Will."

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