A Worcestershire woman won her landmark court battle yesterday over a divorce settlement which was slashed when her former husband went bankrupt.
Wendy Haines was awarded the proceeds of the sale of the matrimonial home, a detached five-bedroom farmhouse, by a judge during divorce proceedings in December 2004.
But her former husband David declared himself bankrupt a year later and the trustees in bankruptcy, with the sanction of the official receiver, claimed the transfer of the proceeds from Strudges Farm, Dunhampton, near Stourport, was void because it had been made at an undervalue.
A district judge turned them down but a High Court judge ruled the transfer was void.
Yesterday Sir Andrew Morritt, the Chancellor of the High Court, and Lord Justices Thorpe and Rix, reversed that ruling, which will return the former husband's £120,000 share of the proceeds of the sale back to the 43-year-old wife.
The trustees are now petitioning the House of Lords for a final challenge over the case which was said to have "far reaching implications" for the powers of the divorce courts.
Afterwards, Mrs Haines said: "I am delighted with the result and appreciate the efforts of counsel and Rob Taylor and Tracey Lowe, my lawyers from Harrison Clark.
"However, whilst I appreciate that my husband's trustees in bankruptcy have only been carrying out their duties, I will only be able to properly celebrate when any chance of an appeal has been dismissed."
Lord Justice Rix, giving his ruling at the Court of Appeal yesterday, said it would be "unfortunate in the extreme" if a settlement approved in a divorce court could be undone for up to five years because the husband goes bankrupt.
"That could even encourage such bankruptcy on the part of a disaffected husband," he said.
Avtar Kanghure QC, representing Mrs Haines, told the three appeal judges at a hearing last month: "The risk of abuse by disgruntled husbands who deliberately incur substantial debt with the express purpose of defeating the matrimonial court's order is obvious."
Mrs Haines owned a garage business with her husband in Kidderminster, Worcestershire. They have one child, born in 1997. She married in 1991 and separated in 2003.
Sir Andrew said the starting point in deciding the case must be the rights of spouses for financial settlements when they divorce.
He said: "I cannot accept that Parliament intended that what must be one of the commonest orders made by courts exercising their matrimonial jurisdiction, namely that the husband do transfer his beneficial interest in the matrimonial home to the wife, should be capable of automatic nullifi-cation at the suit of the trustee in bankruptcy of the husband against whom a bankruptcy order was subsequently made on his own petition."
Lord Justice Thorpe said the objective of the divorce settlement was to provide the mother with the means to look after herself and her daughter.
If the bankruptcy trustees' claim was allowed to stand, the effect would be to deprive mother and child of that security.
Solicitor Rob Taylor, from Worcestershire law firm Harrison Clark LLP, who was part of Mrs Haines' legal team during the case, said: "This verdict represents a victory for common sense.
"A fair balance is now struck between the rights of a divorcing party to obtain a clean break settlement that properly reflects their needs and entitlements and the rights of creditors not to be defrauded of monies which have been deliberately and consciously put beyond their reach".