Family law news: Case details
Your assets may not be safe from a bankrupt ex spouse
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Hill & Another v Haines [2007] EWHC 1012 (Ch)
The basic facts of Hill & Another v Haines were that a property transfer order was made in favour of the wife in December 2004 and shortly afterwards the husband petitioned for his own bankruptcy. In September 2005 the property was transferred to the wife, further to the order, but in December 2005 the husband’s trustee in bankruptcy applied to set the order aside. The key point of the case turned on whether a property adjustment order was made for sufficient consideration to avoid it being caught by s.339 of the Insolvency Act which would allow a trustee to apply to set the order aside on the basis that it was a transaction at an undervalue. The wife argued that she was to be treated as having given sufficient consideration as she had given up a legal right to pursue other financial claims, such as a lump sum order or maintenance, under the Matrimonial Causes Act 1973. However, the court decided that the compromise of a right was not consideration for the purposes of the insolvency legislation; the transaction was at an undervalue and so the transfer of the property should be set aside.
Avis v Turner & Anor [2007] EWCA Civ 748
In the case of Avis v Turner & Anor [2007] EWCA Civ 748 the facts are slightly different from Hill v Haines. As a result of financial proceedings there was no transfer of property, but rather an agreement that the husband retain a 1/3 interest in the matrimonial home, that the wife could live in the property and that it would not be sold until the happening of certain events in the future. However, the husband became bankrupt and the trustee in bankruptcy sought an order for sale of the property to re-coup the husband’s share of the proceeds to settle his debts. The Court of Appeal ruled that the trustee could still make an application under TOLATA 1996 for an order for sale despite the fact that the husband and wife had agreed as a term of their financial settlement that the sale of the property would be postponed until the wife remarried or began cohabiting with another man.