Property adjustment orders

General principles

Section 24 of the Matrimonial Causes Act 1973 (MCA 1973) defines the court’s powers to make a property adjustment order in favour of a party to the marriage or to (or for the benefit of) any child of the family on the making of an order/decree of divorce, nullity or judicial separation. There are corresponding provisions in the Civil Partnership Act 2004 (CPA 2004). The order will not take effect until after the making of a final order/decree absolute (in divorce, nullity or dissolution) or the making of an order/decree of (judicial) separation. See Practice Note: Property adjustment orders—general principles including sections on: Orders that may be made by the court, Property adjustment orders for the benefit of children and Interim orders.

There is no definition of property in respect of which jurisdiction may be exercised. So long as the property is sufficiently identifiable to be specified in the order, it may be subject to a property adjustment order. The available types of property adjustment order include:

  1. a transfer of property

  2. a settlement of property

  3. a variation

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High Court judgment demonstrates usefulness of section 423 of the Insolvency Act 1986 in Schedule 1 claims (Re P (A Child) (Financial Provision))

Family analysis: In this Schedule 1 case the mother received, for her son’s benefit: a housing fund of nearly £1m (the property to be held on trust); child maintenance (including ‘HECSA’/carer’s allowance) until completion of his first degree; and lump sums in respect of his capital needs and her own substantial liabilities (chiefly relating to her unpaid legal fees). The father (whose resources could be measured in the ‘tens of millions of pounds’) had sought to prejudice the mother’s claims via transferring his valuable shares to family members, who then transferred the same into a trust structure (settled under Czech law). A further onwards transfer was then made of the trust’s assets into a Liechtenstein foundation. Inferences were drawn by the court in respect of the level of the father’s wealth, and specifically as to the value of the transferred shares. Detailed findings were made against him in respect of the identified transactions, which had been the focus of the mother’s section 423 application. Although a section 423(2) order was not actually made, the application was adjourned pending the father’s compliance with the award, with security in the sum of £600,000 also ordered, alongside a continuation of the freezing orders made earlier in the proceedings. David Wilkinson, solicitor at Slater Heelis, considers the issues.

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