The recent decision in IN v CH [2025] EWFC 265 offers a textbook example of how the family courts tackle attempts to sidestep financial claims in divorce through asset dispositions. The case concerned the husband’s efforts to move assets out of reach of the wife’s claim—transactions the court found to be intended to defeat her entitlement.
The Facts
Following the breakdown of the marriage, the husband entered into a series of transfers and arrangements which, viewed individually, might have seemed modest. But inch by inch, they created a picture of deliberate manoeuvring designed to frustrate the wife’s claim for financial relief.
The wife applied under Section 37 Matrimonial Causes Act 1973, which allows the court to set aside transactions where there is an intention to defeat a spouse’s financial remedy claim. The threshold is not that the transfer has to succeed in defeating the claim—only that the intention was there.
The Court’s Approach
The judge carefully analysed the pattern of conduct:
- Timing of transfers, aligned with litigation milestones.
- The lack of credible commercial justification for some arrangements.
- The cumulative effect of the dealings, which reduced the pot available for division.
This “inch by inch” strategy backfired. The court was satisfied the husband’s actions engaged s.37, and steps were taken to preserve assets for the wife’s claim.
Key Legal Principles
- Section 37 MCA 1973: empowers the court to set aside dispositions intended to defeat claims, even if they don’t actually succeed in doing so.
- Intention is enough: the test is not whether the transaction did defeat the claim, but whether it was meant to.
- Timing and context matter: suspiciously timed transactions, especially once proceedings are on foot, will be closely scrutinised.
Why It Matters
This judgment underscores the court’s willingness to step in where one party seeks to erode the asset base in a piecemeal fashion. For practitioners, it highlights the importance of:
- Promptly monitoring and investigating asset movements;
- Using s.37 strategically to safeguard assets at risk;
- Advising clients that tactical dispositions are likely to be exposed and unwound.
Final Thought
IN v CH is a reminder that family courts take a dim view of financial manoeuvres designed to tilt the playing field. A spouse cannot, inch by inch, chip away at the marital assets in the hope of leaving their partner short. The law is equipped to unwind such moves—and often does.
