Bankrupting out of ancillary relief

During ancillary relief proceedings, the respondent procures a bankruptcy order on his own petition as a ruse, does the applicant have the ability to apply for an annulment? If not, is there any other action she can take?

The answer is a resounding ‘yes’. The Insolvency Act 1986 section 282(1)(a)  provides that the court may annul a bankruptcy order ‘if it at any time appears to the court that, on grounds existing at the time the order was made, the order ought not to have been made’. The jurisdiction is wide and is expressed in the passive voice, so there is no restriction at all on who may apply. A disgruntled spouse could definitely apply.

There are three reported cases in which the jurisdiction has been exercised. In Woodley v Woodley [1994] 1 WLR 1167 CA the court said that an order procured to defeat a matrimonial claim could be annulled. In F v F [1994] 1 FLR 359 Mr Justice Thorpe (as he then was) did annul. Mr Justice Wilson (as he then was) did the same in Couvaras v Wolf [2002] 2 FLR 107 where the bankruptcy was a sham.

In a county court a district judge could deal with the petition in the matrimonial proceedings which would be an advantage.

The Bankruptcy Court will often transfer the petition to the family judge where this kind of situation arises so that there are not two courts looking at the same thing from two different
angles.

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