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Section 37 of the matrimonial Causes Act

  • soulruler
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06 Aug 12 #347652 by soulruler
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I think I have now as far as possible understood this important section of the Matrimonial Causes Act.

Under this section of the Act it is possible to apply for an injunction preventing assets to be removed from the jurisdiction of UK Courts until Ancillary Relief proceedings are decided, it is allow possible to claw back matrimonial assets that have been transferred out of the marital coffers into third party hands up to 3 years before Petition for divorce and it is allow possible to apply for a section 37 injunction after a Final Hearing in ancillary relief if you believe that the spouse who controls the assets is going to disipate or transfer out of the jurisdiction of the UKs in order to frustrate a ligitimate order of court.

A Section 37 injunction is different from a freezing injunction or Marava (which are not obtained from a family court or district court) in that the application is made with notice to the other party - ie the spouse.

Example of the possibility to apply for a Section 37 to re-claim assets disipated leading up to petition for divorce.

A husband starts up a relationship with another woman during the last few years of his marriage to his wife. During that time he starts to remove assets of the marriage and invests them in a property held in the name of the girlfriend.

The wife petitions for divorce (could be the husband) and the wife then applies for a section 37 on notice either on Form A or to a Judge of the family Division with the required accreditation (extra "qualification") for a hearing. The court confirms that the transfer is in fact an attempt to frustrate the wifes claim in ancillary relief and the disposition (removal of assets) is set aside in favour of the wife.

Another example the couple decide to divorce and one party (with the control of assets) then starts spending and disipating the assets (often cash) both to prevent the other being able to pay for legal assistance and to hide available cash or other funds.

An application is made by the prejudiced spouse to freeze the accounts in order that they are not wasted before an agreement is acheived.

One spouse gets wind that the other is in the process of removing all family assets held in a UK bank account into a bank account in Switzerland. They apply into court to get a freezing injunction to prevent the disposition.

When applying for a section 37 injunction in line with family proceedure rules it is not usually necessary to put up a reserve for damages. When applying for freezing injunctions (which are governed by CPR not FPR) costs follow the event and a reserve for damages needed.

In line with the 3 year rule (both in terms of short marriage and reclaiming disposal of assets) if a spouse decides to divorce within months or years of the other spouse receiving a gift or other asset it is prejudiced to attempt to state that the assets are marital assets and definitely prejudiced to attempt to obtain a section 37 either at the beginning of proceedings or during appeal after a final hearing.



When you apply for a freezing injunction (from Queens Bench, commercial or Chancery) you do so without notice to the other party (ex parte) and then serve the injunction on the account holders before giving notice to the defendent that you have applied for a hearing to have the order executed in your favour without a hearing - cost of this £45.00.

This gives the defendent the opportunity to accept your claim or to apply for a hearing with notice by application - cost £80.00 to have the injunction discharged or varied and have a claim for damages considered.

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06 Aug 12 #347680 by confusedperson
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So if i apply for a section 37 against ex and it is granted, does ex have to pay costs?

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06 Aug 12 #347686 by soulruler
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I am not sure as I have given the book which I used to research this to the trustee in insolvency who has now taken on my case.

However, the general rule in family proceedings is that each party bears their own costs unless it is obvious and gross to disregard conduct in Ancillary Relief proceedings.

I do not know your circumstance but I would have thought that if you have good grounds to apply for a section 37 because of of the unreasonable behaviour of a party then it would not be unreasonable if successful to apply for costs against the defendent of the injunction.

Bear in mind that the assets concerned need to be significant enough to merit the costs or legal costs of the application, the costs of the spouse having to obtain legal advice to defend the application and the costs of court time in adjudicating the application.

I would also add as a personal word of caution that going to court whether in family or any other court in UK is very distressing and places an enormous strain on your emotional and physical welbeing.

That being said if you do have good grounds then it is well worth going to court rather than facing very protracted and endless pingpoing correspondence between two warring spouses. Additionally it puts a stop to a harrassing and abusive spouse thinking that they can make your life hell for the rest of time and puts a little more (like a whole load more) focus in that persons mind about the real powers of court orders and why it is sensible to be honest.

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06 Aug 12 #347704 by Fiona
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confusedperson, my understanding is that the general rule in"financial remedy" proceedings that each party pays their own costs doesn''t apply to interim orders such as s37 orders . That means the general rule that the unsuccessful party pays costs
does apply. See Part 28 Family Procedure Rules 2010.

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06 Aug 12 #347707 by soulruler
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When my ex and his legals applied for a section 37 during my appeal following an extrajudical order of court the court wrote the order and discharged it even before I had to defend it - not that I did as it was sought ex parte which isn''t the proceedure for section 37.

I then waited 5 months and had to dismiss my legal teams as they wouldn''t give me any answers or any ideas as to what to do next.

2 days after the court had confirmation from me in writing that I had dismissed my legal team and was self representing the High Court judge involved in Appeal court made his own decision (so it was a Judges summons to court) and called a costs hearing in RCJ which he did not give me notice to at all.

I only got wind because my ex-s legal team threatened me that I had to pay his costs in the application in the sum of £100,000!

When we got to the costs hearing they demanded another section 37 by drafting a contempt of court order against me and giving me notice by e-mail that this is what they were doing.

They told me that as I was unsuccessful at beating my own offer (what ever that meant) I was due to pay all their costs in appeal and all my legal costs in appeal.

I wrote back to them telling them that as they had offered legal advice and fraudulent legal advice at that, they had forced me into a contract for a consideration which was enforceable in law.

Although they told me that my submission was absurd (their words) the courts have taken the view that I am right as in the reference which refers to my legal team they put my ex husbands legal teams reference.:laugh:
Good here in''it!

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07 Aug 12 #347893 by confusedperson
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Thanks both for the relpies. Yes i have good documentary evidence for th section 37 (registy deeds before and after, dated in the middle of proceedings)It was a blatant attempt at deceiving the court so hopeful that he has to pay costs then ;)

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13 Jul 20 #513260 by SolicitorsFirm
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Section 37 proceedings are proceedings which are not always covered by the FPR costs regime. This means that depending on the circumstances of where the application is made, it is a situation where costs follow the cause - i.e loser can be Ordered to pay winners costs

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