AP v BP & Ors (financial remedies - appeal - disclosure - privilege)
[2023] EWFC 169 (B)
AP v BP & Ors (financial remedies - s37 application to set aside disposition)
29 August 2023
[2023] EWFC 170 (B)
Family Court
A wife secretly sold shares in a company to her husband's business rivals during divorce proceedings. The judge decided this was a sneaky way to reduce the husband's share of the marital assets and ordered the shares to be returned, finding the wife and the business rivals acted dishonestly.
Key Facts
- •Husband (AP) and wife (BP) married in 2002, separated in 2017, and have three children.
- •Wife petitioned for divorce in 2018 and initiated financial remedy proceedings.
- •Wife sold shareholdings in Company B to intervenors (PN and GN) in 2020/2021 without husband's knowledge.
- •Husband alleges wife intended to undermine his position in a commercial dispute and deplete marital assets.
- •Husband applied under s.37 Matrimonial Causes Act 1973 to set aside share transfers.
- •Company B's value is significantly tied to Company A, the family's primary income stream.
- •Intervenors became majority shareholders in Company B after the share transfers.
Legal Principles
Section 37 of the Matrimonial Causes Act 1973 allows the court to set aside dispositions made with the intention of defeating a claim for financial relief.
Matrimonial Causes Act 1973, s.37
The intention to defeat a claim for financial relief need not be the dominant motive; a subsidiary but material motive suffices.
Kremen v Agrest and Fishman [2011] 2 FLR 478
A presumption arises that a disposition made less than three years before an application under s.37 was made with the intention of defeating the claim, unless the contrary is shown.
Matrimonial Causes Act 1973, s.37(5)
Section 37(4) provides a defence if the disposition was made for valuable consideration to a person acting in good faith without notice of the intention to defeat the claim.
Matrimonial Causes Act 1973, s.37(4)
Constructive knowledge, including knowing something that should have prompted further inquiry, is sufficient to negate the section 37(4) defence.
Hunt v Luck [1901] 1 Ch 45
Outcomes
Husband's application to set aside the share transfers succeeded.
The court found the wife acted with the intention of defeating the husband's claim for financial relief, and the intervenors did not meet the requirements of the s.37(4) defence.
The share transfers were set aside.
The wife's actions, coupled with the intervenors' conduct, demonstrated an intention to undermine the husband's position in the financial remedy proceedings.
Consequential orders to restore the shareholdings to their pre-transfer state were ordered.
To return the situation to before the agreement of 30 October 2020, where the wife held 70 shares and ML held 30.