Judges slam 'devious' husbands who declare bankruptcy to stop divorce settlements

By Daily Mail Reporter

 

17th March 2009

                                                                                                    

 

Lord Justice Wilson: Ordered William Paulin to pay wife Nancy £1million after he was 'dishonest' about bankruptcy

Senior judges today hit out against 'devious' husbands who declare themselves bankrupt to stop the courts ordering divorce settlements with their former wives.

They dismissed an appeal by businessman William Paulin against a ruling annulling his bankruptcy and ordering him to pay a £1 million lump sum to his former wife, Nancy.

Lord Justice Wilson, giving the judgement of the Court of Appeal, said the sums owed by the husband were more than covered by the value of his assets.

The judge started his ruling: 'A tactic now occasionally adopted by a devious husband confronted with an application by his wife for financial relief ancillary to divorce proceedings is to issue proceedings for a bankruptcy order to be made against himself.'

This resulted in the divorce court being unable to order a settlement for the wife, who then must apply to the courts to annul the bankruptcy.

Lord Justice Wilson said Mrs Paulin had won such an order from a deputy High Court judge who went on to award her the 'substantial lump sum payment'.

He said the husband, an entrepreneur described by his wife as an 'asset-stripper', was no longer challenging the High Court judge's 'adverse findings' about his honesty.

Mr Paulin had been disqualified for acting as a director of a company, without the leave of the court, for seven years in December 2004 for breaching financial duties.

Lord Justice Wilson said Mr Paulin then became a business consultant earning £100,000 a year and even when he declared himself bankrupt, he continued working, earning in excess of £100,000, had the use of a Rolls-Royce Phantom Drophead Coupe and enjoyed a 'generally lavish lifestyle'.

'His case was that, once he had been discharged from bankruptcy in ordinary course, he should during the following two years be able to amass £500,000 with which to satisfy the wife's claims.'

But Mrs Paulin told the High Court judge that her husband had substantial undisclosed assets, and that he had told her father that he had £8 million in a bank account.

The High Court judge accepted the father's evidence and said the husband was 'not being straightforward or a reliable witness'.

He also accepted the wife's evidence that her husband had threatened that were she to take him to court, he would hide his assets and ensure that she got nothing.

The former couple, who have three children, were married in 1999 and in 2003 the husband bought a luxury property near Chelmsford, Essex, to be the matrimonial home.

They moved in in February 2005 but by then the marriage was breaking down, said Lord Justice Wilson.

'After three weeks the husband left. In May 2005, while the wife and children were on holiday, he moved back into it.

'The wife and children thereupon moved to another, much more modest, house in Chelmsford.'

By agreement the main house was sold for nearly £2 million, half of which was held by court order.

Lord Justice Wilson said: 'Meanwhile, however, the husband had taken elaborate steps designed to disable the court from awarding the wife any part of that equity.'

But the High Court judge rejected Mr Paulin's claim that the company he set up to act as a vehicle for the ownership of the property was bankrupt and owed £980,000.

In 2006, the Inland Revenue and a company did obtain judgments against Mr Paulin for a total of £99,000.

Lord Justice Wilson said: 'The husband no doubt considered that these events provided an ostensibly convincing platform for his own issue of a petition in the Chelmsford Court Court for a bankruptcy order to be made against himself on the ground that he was unable to pay his debts.'

The appeal judge said it may also have been related to the fact that his wife had won an order for interim maintenance payments.

Mr Paulin claimed his total debts were £191,000 and that he had no freehold property or property abroad.

The High Court judge had at first refused to annul the bankruptcy order but reversed his decision at a second hearing, ruling that the husband was able to pay his debts and that he had declared himself bankrupt to defeat the wife's claims.

Lord Justice Wilson said Mr Paulin had made a 'substantially dishonest statement' for his bankruptcy hearing and at the time held assets which more than covered his debts.

 

                                                                                   

Abuse case couple lose fight to get children back

 

By Stephen Howard

Thursday, 12 February 2009

A couple whose children were taken from them and adopted cannot have them back, even though they "may be right" in believing they suffered a miscarriage of justice, three Court of Appeal judges have ruled.

Nicky and Mark Webster, from Cromer, Norfolk, were seeking to set aside adoption orders made in December 2005 for their three eldest children, identified only as A, B and C.

The children were taken into care in 2004 because the local authority believed that one child, a boy, had suffered non-accidental injuries inflicted by one or both of his parents. Two were adopted by one family; the third went to another. Evidence came to light in 2007 showing that the child may not have suffered deliberate injury, as his fractures may have been attributable to scurvy or iron deficiency caused by a feeding disorder.

The couple applied to the courts to try to get their children back. But a summary of yesterday's decision released by the three Court of Appeal judges reads: "The case emphasises the finality of adoption orders. The circumstances in which adoption orders can be revoked or set aside are extremely limited. None applied in the present case. The court concluded that after three years it was in any event too late to set the orders aside, and that it would not be in the interests of the children to do so.

"It is therefore possible (Mr and Mrs Webster would say probable) that the basis upon which A, B and C were taken into care and subsequently adopted (Mr and Mrs Webster's alleged non-accidental injury of child B) was wrong."

The statement continued: "Mr and Mrs Webster believe that they have suffered a miscarriage of justice. They may be right. It would, however, be wrong in the court's view to criticise any of the doctors or social workers in the case. Each has acted properly throughout. If there is a lesson to be learned from the case it is the need to obtain second opinions on injuries to children at the earliest opportunity, particularly in cases where, as here, the facts are unusual."

The Websters had wanted a re-hearing of the care proceedings to challenge the adoption order – a move which could have enabled the children to be returned to them or at least allow them to have contact.

At the hearing in December last year, their counsel, Ian Peddie QC, told Lord Justice Wall, Lord Justice Moore-Bick and Lord Justice Wilson that it was an "exceptional" case. "We say there has been a terrible miscarriage of justice and the natural parents' primary concern is to correct it," he said. "It is our assertion that the children need to know the truth as to why they were adopted."

Mr Webster, 35, and his 27-year-old wife fled to Ireland to stop their fourth child, Brandon, six, being taken into care at birth but last year the local authority dropped proceedings after accepting that he was in "robust good health".

In his judgment, Lord Justice Wall said: "For Mr and Mrs Webster... the case has been a disaster, quite apart from any breach of their rights under the European Convention on Human Rights." He added that the case had been a "deeply regrettable experience for the local authority" and a "painful learning experience" for the medical profession.