25 November 2016
Dismissal of an oral renewal by a Trustee of Bankruptcy appealing the strike out of a claim under section 23 and 24 of the Matrimonial Causes Act 1973.
Facts
- In June 2009, the husband and wife agreed, inter alia, that the husband would make periodical payments of £24,000 p/a to the wife, and repay the sum of circa £1.4m. A consent order was agreed in these terms on 5 June 2009, and approved on 16 July 2009.
- The husband was made bankrupt on 7 July 2009, a petition having been presented against him on 9 March 2009.
- In November 2014, the husband committed suicide.
- In July 2015, the husband’s trustee in bankruptcy issued applications:
- For the consent order in the financial remedies proceedings be declared void;
- Against the wife pursuant to sections 23 and 24 of the Matrimonial Causes Act 1973 (‘MCA’); and
- For payments of £40,000 from the husband to the wife be declared to be transactions at an undervalue pursuant to s.339 IA, or alternatively voidable preferences pursuant to s.340 IA.
- The wife applied to strike out these applications.
- The judge declared that all dispositions by the husband pursuant to the consent order were void under s.284 of the Insolvency Act 1986 (‘IA’).
- He struck out the application for an order for a lump sum or property adjustment under sections 23 and 24 MCA.
- He struck out the application for a declaration that the payments made by the husband to the wife totalling £40,000 were transactions at an undervalue pursuant to s.339 of the
- He ordered the trustee to pay 75% of the wife’s costs of the strike-out application.
- This was the trustee’s oral renewal hearing for leave to appeal the strike out of his claim for an order under ss.23 and 24 of the MCA.
- The wife also made a cross application to set aside the leave to appeal which had been granted on paper in respect of the strike out of the application for the declaration under s.339 of IA, and the order for costs.
Held
- Mr Robin Dicker QC, sitting as Deputy High Court Judge, dismissed the trustee’s renewed application for permission to appeal and the wife’s cross application.
- A claim under ss.23 and 24 of the MCA ceases to be possible following the death of one of the parties [13]. The MCA is a personal jurisdiction arising between the parties to the marriage or the children of the marriage [15]. The terms of s.27 of the MCA reinforce the conclusion that relief is only available during joint lives [15]. Further, the court would not carry out the discretionary exercise under s.25 of the MCA, after the death of the husband, for the sole benefit of the husband’s creditors [19]. The creditor in bankruptcy could not have a greater claim than the bankrupt.
- Although dispositive of the claim, the rights of a spouse under the MCA are not causes of action for the purposes of s.436 of the IA [21].
- The wife had failed to satisfy the high hurdle applicable in applications to set aside leave to appeal, namely that the court had been misled in the course of the application.