Key points

Rights under s23, s24 and s31 of the Matrimonial Causes Act 1973 (the “Act”) can only be pursued by the spouses themselves. Consequently, any ongoing action brought pursuant to those sections of the Act does not vest in the trustee in bankruptcy on appointment.

The facts

The wife of a deceased bankrupt sought to strike out an application made by the trustee in bankruptcy in which he claimed: (i) that dispositions made pursuant to a consent order were void under s284 of the Insolvency Act 1986;9 (ii) that the ability to seek lump sum payments under s23 and s24 of the Act should vest in him as the cause of action was an asset of the bankrupt’s estate; and (iii) payments amounting £40,000 made by the deceased to his wife were transactions at undervalue or preferences.

The decision

The application was granted in part.

In relation to the consent order, the registrar considered it obvious that the payment of maintenance was a disposition of property caught by s284 of the Insolvency Act 1986.

In reviewing the provisions of the Act, the court held that s23 and s24 could only be pursued by the spouses themselves and the rights did not endure after the death of either. Orders made pursuant to those sections were for the parties to the marriage and (if relevant) for the benefit of their children.

The payments totaling £40,000 appeared to be part of an ongoing arrangement of loans between the spouses. There was nothing to suggest that there had been no consideration for the payments and so the trustee’s claim, in relation to transactions at an undervalue, was struck out. The claim in relation to whether these payments constituted a preference was allowed to proceed.

Comment

A trustee in bankruptcy of a deceased’s estate cannot step into the shoes of the deceased to pursue ancillary relief under ss23 and 24 of the Act for the benefit of his creditors.

Robert v Woodall [2016] EWHC 538 (Ch)

Read more articles in the May 2016 edition of RCR Update