The High Court has confirmed an order setting aside transfers of 60% of a company’s shares by a respondent in ongoing post-divorce financial proceedings, and has frozen further dealings with his shareholding and interests in the company.
In an ex tempore judgment delivered on 9 October 2024, Ms Justice Nuala Jackson said the transfers to two third parties were made on or about 18 October 2021, ten days after an English court made financial orders in the couple’s divorce proceedings. The respondent had previously held all the shares. The applicant brought the motion under section 35 of the Family Law Act 1995, which allows the court to set aside certain dispositions intended to defeat a claim for relief.
The judge said the transfer was made within three years of the application, so the law presumed an intention to defeat the applicant’s claim unless the contrary was shown. She found the respondent had not provided the share transfer agreement or other documentation supporting the explanations offered. She also noted inconsistencies between his account and that of one transferee, who said the shares were payment for company management work. That transferee had been aware of the English matrimonial proceedings, the judge said.
The judge had previously made an order setting aside the transfers, subject to the third parties having an opportunity to make submissions. Both attended court; one filed an affidavit and the other chose not to. After considering their opportunity to respond, the judge confirmed the setting aside order. She also made freezing orders under section 35 covering any disposition of the respondent’s shares and any interference by him with his assets or interests in the company.
The judgment records unresolved questions about company filings: a return appeared to show a signature date of 29 October 2021 but a Companies Office search listed it as received on 18 October. The judge said this might be addressed when the matter returned to court. She also noted that questions about beneficial ownership of two other properties were not relevant to this motion and would have to be considered in the ongoing case. The costs of the application were reserved to the hearing. The judgment did not determine the substantive Part III financial relief application.