The court discussed the interplay of family and insolvency proceedings: ‘Since the wife is unable to prove in the husband’s bankruptcy, the position . . is that the husband’s trustee must use the andpound;385,000 in paying the trustee’s expenses and remuneration and, subject to that, he must distribute the money between the husband’s creditors but excluding the wife. This would mean there would be a substantial surplus available to be returned to the husband. No doubt the wife could take steps to intercept the surplus. Even so, the result would be that the unsecured creditors would be paid in full, save for the wife. She would not receive the whole of the lump sum ordered by the judge. Indeed, far from even sharing equally with the husband’s other creditors, she would rank behind them all. She would receive the crumbs from the husband’s table left unconsumed by his other creditors. This is the consequence of r 12.3(2)(a) ‘ and ‘I feel bound to say that the exclusion of an obligation to pay a lump sum arising under an order in family proceedings from proof as a debt in bankruptcy is a matter which would bear re-examination as a matter of urgency . . ‘
Judges:
Sir D Nicholls V-C
Citations:
[1996] 1 FLR 334
Jurisdiction:
England and Wales
Citing:
Appeal From – Mordant v Hallas ChD 2-Aug-1993
A debt due which consisted of a matrimonial lump sum order is not provable in a bankruptcy. . .
Cited – Woodley v Woodley (2) CA 12-Apr-1993
A stay of execution of an order against matrimonial assets was not defeated by bankruptcy. As to the interplay of the Insolvency Rules and matrimonial proceedings.
Balcombe LJ said: ‘I cannot leave this case without saying something about the . .
Cited – Smith (a bankrupt) v Braintree District Council HL 1989
The House considered the effects of bankruptcy on the imposition of a committal to imprisonment in default of paying rates.
The purpose of section 285 is to preserve the estate of the bankrupt for the benefit of his unsecured creditors.
Cited by:
Cited – Flightline Ltd v Edwards and Another ChD 2-Aug-2002
Money had been paid into an account in the joint names of the parties’ solicitors in order to purchase the release of the applicants from an asset freezing order. The respondent company was in liquidation. It was argued that the payment of funds . .
Appealed to – Mordant v Hallas ChD 2-Aug-1993
A debt due which consisted of a matrimonial lump sum order is not provable in a bankruptcy. . .
Cited – Gita Ram v Baskinder Ram,Solinder Ram, Monder Ram and Maurice William Russell CA 5-Nov-2004
A bankrupt had, before his bankruptcy disposed of his share in a house at an undervalue. His wife appealed an order that the share disposed of should vest entirely in the trustee in bankruptcy. Matrimonial proceedings had also been commenced.
Cited – McRoberts v McRoberts ChD 1-Nov-2012
The parties had agreed to an ancillary relief order on their divorce. The husband was made bankrupt without having paid the lump sum agreed. The former wife and now claimant had received no dividend. Debts which were not provable in the bankruptcy . .
Lists of cited by and citing cases may be incomplete.
Family, Insolvency
Updated: 27 October 2022; Ref: scu.182273