Ruling clarifies position on debt post-divorce

Ruling clarifies position on debt post-divorce

A prominent High Court case involving TV presenter Trinny Woodall and her late ex-husband’s creditors has provided a useful insight into the handling of debts following a divorce.

Ms Woodall married Johnny Elichaoff in 1999 and after a ten year marriage, the couple divorced in 2009.

During the divorce settlement it was agreed that Mr Elichaoff would pay Ms Woodall and their daughter £24,000 a year and repay a sum of £1.4 million to her.

However, just nine days before the divorce was finalised Mr Elichaoff was made bankrupt and the repayment was later declared void.

To make matters worse for the well-known presenter, in July 2015 the trustee in bankruptcy, Ian Robert, issued an application against Ms Woodall seeking a lump sum or a property adjustment order, including payment of a sum equivalent to Mr Elichaoff’s debts of around £285,000.

A registrar struck out Mr Robert’s claim earlier this year declaring it had “no merit whatsoever”. The case was recently taken to the High Court, where Deputy Judge Robin Dicker quickly dismissed Mr Robert’s renewed application for permission to appeal the order.

He said: “I confess to some initial surprise at the suggestion that a trustee in bankruptcy is entitled, after the death of the bankrupt, to apply for an order for financial relief against the surviving party to the marriage, for the benefit of the bankrupt’s creditors.”

That initial reaction was “only reinforced” during the course of the hearing in London, and Deputy Judge Robin Dicker said that the registrar was correct to have struck out the claim on the basis that Mr Robert had no real prospect of success.

During deliberations the Court considered whether the Matrimonial Causes Act 1973 (the Act) created rights which could only be pursued by the spouses themselves or hybrid claims which vest in a trustee in bankruptcy.

The Court held that the provisions of the Act created rights which could only be pursued by spouses for themselves and for the benefit of their children. However, these rights did not extend beyond the spouses’ joint lives.

The judge also rejected a bid from Ms Woodall to set aside an order giving Mr Robert permission to appeal against a decision striking out his claim over £40,000 given to her by Mr Elichaoff in late 2008 before the start of the bankruptcy proceedings.

Link: Robert v Woodall [2016] EWHC 538 (Ch)