A divorcing wife has failed in her attempt to get her husband’s bankruptcy order annulled. She suspected that he had deliberately got himself into debt to avoid his financial obligations to her, but the court said there was no evidence to support such a claim.

The issue arose after the wife had petitioned for divorce and a financial provision hearing took place.

There were also family proceedings concerning contact with their two children. On the handing down of the financial provision judgment, which ordered that the husband’s share in the former matrimonial home was to be transferred to the wife, it was revealed that he had been made bankrupt for non-payment of a loan from a friend to pay for the costs of the legal proceedings.

The wife applied to annul the bankruptcy order on the grounds that the husband had not been unable to pay his debts at the time of his bankruptcy, he had colluded with his friend to create the debt, and he had given inconsistent information about his place of residence and his finances.

She contended that the husband’s admitted falsification of a drug test report in family proceedings infected how the court should view the disclosure he had made in the bankruptcy proceedings about his financial circumstances.

The High Court refused the application.

It held that at there were no grounds existing at the time of the bankruptcy to suggest that an order should not have been made

The inconsistencies in the husband’s evidence were more apparent than real. His admitted failure to provide an honest drug test result in the family proceedings did not, without more, infect the bankruptcy and act as a lever to open the lid on the bankruptcy: there was no evidence of fraud, collusion, mistake or misrepresentation.

There was no evidence that the husband had failed to make full and frank disclosure of his financial position during the bankruptcy proceedings. The evidence supported a finding that he was unable to pay his debts.

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Case Citations: Lin v Gudmundsson [2021] EWHC 820 (Ch) Chief ICC Judge Briggs

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