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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

22 MAY 2013

Withers LLP v Harrison-Welch and Another [2012] EWHC 3077 (QB); [2013] BPIR 145

(Queen's Bench Division, His Honour Judge Shaun Spencer QC (sitting as a High Court judge), 4 October 2012)

HW had been substantially unsuccessful in ancillary relief proceedings against her former husband. The solicitors who had acted for her obtained judgment for its fees, and a charging order over a property to secure that judgment. It then transpired that shortly after the solicitors had commenced proceedings for the fees HW had transferred the property to herself and her new husband, retaining only a 1% interest herself. His Honour Judge Shaun Spencer QC (sitting as a High Court judge) dismissed the solicitors' application to avoid the transfer as a transaction defrauding creditors under s 423 of the Act, holding that the new husband had provided substantial consideration to HW so it could not be a transaction at an undervalue. Further, the transfer related to an understanding made between them 2 or 3 years earlier, so the transfer was not made with a purpose to defeat the solicitors' claim, even though it would clearly have had that effect. The solicitors were also unsuccessful in seeking a third-party costs order under s 51 of the Senior Courts Act 1981, on the basis that the new husband had helped to fund H-W's unsuccessful counterclaim against the solicitors; he was merely seeking to support his wife.

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