Re Elichaoff: Roberts v Woodall [2016] EWHC 538

22nd August 2016

In the recent High Court decision of Re Elichaoff [2016] EWHC 538 James Pickering represented a trustee in bankruptcy seeking to (1) declare void an order for ancillary relief made by consent within divorce proceedings and (2) step into the bankrupt husband’s shoes and pursue for the benefit of the bankruptcy estate the financial provision which the husband ought to have received at an arm’s length contested hearing.

In 1999 the husband married the wife, a well-known TV personality. In November 2008 the wife presented a divorce petition. In March 2009 the husband was presented with a bankruptcy petition. Shortly after, discussions took place between the husband and the wife resulting in a consent order in the divorce proceedings under which the (poor) husband had to pay money to the (wealthy) wife. On 7 July 2009 the husband was made bankrupt and just 9 days later on 16 July 2009 a district judge approved the consent order within the divorce proceedings – albeit in ignorance of the bankruptcy.

The husband’s trustee’s first application was to have the consent order declared void. On this, he was successful, the court relying upon section 284 of the IA 1986 and Re Flint [1993] Ch 319. The trustee’s second application to step into the shoes of the husband and pursue the ancillary relief which the husband ought to have obtained at a contested arm’s length hearing, however, was struck out on the basis that although in general causes of action belonging to a bankrupt will vest in a trustee, applications under the MCA 1973 could only ever be pursued by a party to a marriage during their joint lifetimes – and accordingly those rights were not causes of action capable of passing on bankruptcy to a trustee in bankruptcy. The latter decision is currently subject to appeal and is due to be heard in late 2016.

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