In the financial remedy case of AB v CD & Ors [2025] EWFC 958, His Honour Judge Richard Williams provides a detailed, forensic examination of when and how a financial remedy applicant can succeed in setting aside transactions designed to defeat their claim. The judgment is a masterclass in navigating section 37 of the Matrimonial Causes Act 1973 (MCA 1973)—and a warning about the complexity of proving your case when the evidence is murky.

The Basics: What is a Section 37 Application?

Section 37 MCA 1973 allows a party to apply to set aside transactions made by their spouse if they were done with the intention of defeating a financial remedy claim.
The court must consider three key questions:

1. Was there a disposition?
2. Was it made with the intention of defeating the applicant’s claim?
3. Would different (or greater) financial relief have been possible without the disposition?

If a transaction took place within three years of the application, the burden shifts to the transferring party to prove they did not intend to defeat the claim.

The Facts: Family Fallout and a Share Transfer

Following their separation in 2019, CD transferred his shares in a family-run caravan park business (Guthrum Ltd) equally to his mother (EF) and brother (GH). His estranged wife (AB) alleged that the transfer was a deliberate ploy to defeat her financial claims on divorce.

Initially, CD agreed with AB’s case—but on the morning of the trial, he switched sides, supporting his mother’s claim that he had always held the shares on trust for her. The judge was unimpressed, noting deep family divisions and “shifting sands” in the parties’ evidence.

The Court’s Approach

Judge Williams meticulously applied the section 37 framework:

• Disposition: The share transfers were clearly a disposition.
• Intention: Despite CD’s last-minute volte-face, the judge found sufficient evidence to infer that the transfers were intended to defeat AB’s claim, particularly given the timing (shortly after separation) and surrounding circumstances.
• Consequences: Crucially, even if the transferred shares had no significant value at the time (based on expert valuation), the court could still find that AB’s potential award was frustrated.

The judgment emphasised that “defeating” a claim isn’t limited to hiding valuable assets; it includes making enforcement harder or reducing the resources available for distribution.

Practical Lessons for Family Law Practitioners

• Timing is Critical: Dispositions made within three years of an application automatically trigger a rebuttable presumption of wrongful intent.
• Burden of Proof: The party seeking to defend the transaction must present a convincing, coherent explanation backed by evidence—shifting stories damage credibility.
• Valuation Battles: Valuing family businesses is notoriously fragile. Courts prefer solid, contemporaneous documents over fallible human memory.
• Parallel Litigation Risk: Efforts to game insolvency or corporate structures in parallel proceedings may unravel under scrutiny in family courts.

Final Thought

AB v CD shows that setting aside dodgy transactions is far from straightforward. Courts will apply a fact-sensitive and forensic analysis, and applicants need to present clear evidence of motive, effect, and loss. Tactical share transfers or “paper moves” shortly after separation may not be enough to defeat a determined applicant—or a sceptical judge.

In short: trying to outsmart the family court with clever asset shuffling rarely ends well.