In the case of Edgerton v Edgerton and another , The Court of Appeal allowed an appeal by a husband in respect of ancillary relief proceedings and orders that had been made by the High Court in a partnership action.
The husband and wife had been in an on-off relationship for more than 25 years. In that time that had married, divorced and remarried. In 2008 the wife commenced divorce proceedings.
The husband had been involved in a partnership and owed a business associate a large amount of money that had been loaned to establish the business. In the Chancery Division of the High Court an order was made that most of the husband’s alleged assets were beneficially owned by, or were to be transferred to, his business associate.
In his appeal the husband challenged the court’s ruling that the wife could continue ancillary relief proceedings despite the Chancery Order. He also argued that he should not be released from an undertaking which effectively froze his assets. An appeal was also bought by his business associate who challenged a freezing order in favour of the wife for a sum of at least £485,000.
The ruling that the wife could technically ignore the Chancery Order in the ancillary relief proceedings was dismissed. For the Order to be disregarded it would need to be challenged by the wife on the grounds of it being obtained with fraud of collusion.
Where a dispute arises about the ownership of property in ancillary relief proceedings between a spouse and a third party there are several steps that should be taken;
- The third party should join the proceedings at the earliest opportunity.
- The issue should be fully pleaded with points of claim and defence.
- Separate witness statements should be gathered in relation to the dispute.
- The dispute should be heard separately as a preliminary issue.
The appeal by the husband and the business associate against the undertaking and freezing order were dismissed.