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Thu 28th Jul 2011 INSOLVENCY: PERSONAL BANKRUPTCY: ANNULMENT: TRUSTEE'S REMUNERATION
The Factual Matrix
The applications brought by the wife (Ms Mekarska) were for annulment of the bankruptcy order made against her husband (Mr Ruiz) in 2007 and an appeal against a financial order made in 2008 in ancillary relief proceedings following their divorce.
Sadly in 2006 Mr and Mrs Ruiz's marriage broke down. Divorce proceedings were initiated in the county Court and in October 2006 the wife obtained a freezing order against the husband. In November 2006 she also obtained an occupation order at which point the husband left the matrimonial home.
In 2006 and 2007 the husband ran up large unsecured debts and in December 2007 the husband petitioned for his own bankruptcy, and a bankruptcy order was made without notice to the wife.
The Trustee in Bankruptcy was appointed in February 2008. In late March 2008 the wife became aware of the husband's bankruptcy and on 3 April 2008 her solicitor wrote to the Trustee in Bankruptcy's solicitor to the effect that they were instructed to apply for an annulment.
Despite this no application for annulment was made until September 2009 by which time the wife was acting in person. Her explanation for the delay was that she could not afford the costs.
The financial order on divorce was made on 17 November 2008. The District Judge ordered, amongst other things, that the wife should receive a lump sum equal to the entire surplus after the bankruptcy debts and costs were cleared. Neither party then sought to appeal.
Following the hearing the value of the matrimonial home fell. The Trustee in Bankruptcy applied for a possession order. By March 2011 the overall amount required to pay the bankruptcy in full had grown to £260,000. So even if the annulment application and the appeal against the financial order on divorce succeeded that would still not be enough to salvage the wife's housing situation. She would also need to deprive the creditors of some or all of the sums due to them after disallowing the fees and expenses of the Trustee in Bankruptcy.
The Decision
The Court held that it had not been made promptly. The husband was "commercially insolvent" and his debtor's petition was not presented to frustrate his wife's legitimate claims and there were no grounds for intervening in relation to the Trustee in Bankruptcy's remuneration and costs. Her appeal against a financial order made in ancillary relief proceedings was also refused as the events taking place after such order did not justify interfering with the decision of the District Judge.
