Audun Gudmundsson v Hsiao-Mei Lin
[2024] EWHC 1576 (Fam)
Maxine Reid-Roberts & Anor v Hsiao Mei-Lin & Anor
10 April 2024
[2024] EWHC 759 (Ch)
High Court
A husband tried to trick the court to avoid giving his ex-wife their house. The judge decided this was unfair, and the wife and children can keep the house until at least 2032 because of the husband's bad behavior and the impact on the family's mental health.
Key Facts
- •Application by joint trustees in bankruptcy for declarations on beneficial ownership of a former matrimonial home (FMH), possession and sale orders under s.335A Insolvency Act 1986 (IA86), and costs variation orders under s.375 IA86.
- •First Respondent (Ms Lin), former spouse, resides in FMH with two children and lodgers.
- •Bankrupt (Second Respondent) did not participate.
- •Ms Lin claims Bankrupt divested his interest in FMH before bankruptcy order via s.53(1) Law of Property Act 1925 disposition, relying on Hudson v Hathway.
- •Ms Lin argues against possession and sale order under s.335A IA86 due to delays in Family Court property adjustment order, children's needs, and complexities of bankrupt's assets and liabilities, including a large debt to Esquiline Finance Limited (EFL).
- •EFL's debt is disputed by the bankrupt and linked to fraudulent activities of his former solicitor, Mr. Jones.
- •Significant delay in Family Court judgment due to Bankrupt's actions in repeatedly requesting postponements without disclosing bankruptcy proceedings.
- •Ms Lin's mental health and that of her son are negatively affected by the proceedings.
- •The Applicants argue that previous admissions by Ms Lin preclude her current arguments.
- •The Court determines that Ms Lin's previous comments were not formal admissions and addresses the merits of the new argument.
Legal Principles
Disposition of an equitable interest in land must comply with s.53(1)(c) Law of Property Act 1925.
Law of Property Act 1925, s.53(1)(c)
In determining whether a document is 'signed' for the purposes of s.53(1)(c), the touchstone is an intention to authenticate the document.
Hudson v Hathway [2023] KB 345
In divorce proceedings, only a consent order under s.33A Matrimonial Causes Act 1973 can enforce agreements reached during negotiations.
Xydhias v Xydhias [1999] All ER 386
Under s.335A IA86, the Court must make an order that is just and reasonable, considering creditors' interests, conduct of the spouse, needs of the spouse and children, and all circumstances. After one year, creditors' interests usually outweigh others unless exceptional circumstances exist.
Insolvency Act 1986, s.335A
Issue estoppel only applies in subsequent proceedings between the same parties.
Arnold v National Westminster Bank plc [1991] 2 AC 93
CPR 14.5 governs applications for permission to withdraw admissions.
Civil Procedure Rules, Part 14.5
A summary assessment of costs under CPR 44.1 is usually conducted by the judge who heard the case.
Civil Procedure Rules, Part 44.1
Outcomes
Ms Lin's argument under s.53(1)(c) LPA 1925 was allowed to proceed.
The Court found that previous comments made by Ms Lin did not constitute formal admissions and that the issue was a question of law based on the interpretation of written communications.
The Court found that there was no immediate disposition of the Bankrupt's interest in the FMH before the bankruptcy order.
The communications between the Bankrupt and Ms Lin did not satisfy the requirements for a legally binding disposition under s.53(1)(c) LPA 1925, particularly considering the context of ongoing divorce proceedings and the application of Xydhias v Xydhias.
The Court found exceptional circumstances under s.335A IA86 preventing an immediate possession and sale order.
The Bankrupt's misconduct in concealing bankruptcy proceedings from the Family Court, causing significant delays and preventing Ms Lin from securing the FMH, coupled with the serious impact on Ms Lin and her son's mental health, were deemed exceptional.
The sale of the FMH was deferred until after 31 July 2032.
This decision balances the interests of creditors with the exceptional circumstances, the needs of the children, and the significant hardship that an immediate sale would cause Ms Lin and her children.
The application to vary costs orders under s.375 IA86 was partially granted.
The Court ordered that Ms Lin's liability for costs under the Court Order dated 12 March 2021 should be deducted from her share of the net proceeds of sale. The application to vary the costs order from Chief ICC Judge Briggs's decision on 15 April 2021 was refused due to procedural issues and the lack of information for summary assessment.