A woman awarded the proceeds of her matrimonial home in a divorce settlement had half taken away when her husband went bankrupt, the Court of Appeal was told today.

Wendy Haines, 43, is now battling with bankruptcy trustees in a case which has “far reaching implications” for orders made in the divorce courts, the court was told.

Ms Haines was awarded the detached five-bedroom farmhouse near Stourport-on-Severn in Worcestershire by a judge. Shortly afterwards her husband declared himself bankrupt.

His bankruptcy trustees are now claiming half the money from the sale of the house, the proceeds of which have been frozen, to help pay creditors.

Avtar Kanghure, QC, representing Ms Haines, told three appeal judges headed by Sir Andrew Morritt, the Chancellor of the High Court: “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.”

A district judge awarded the jointly-owned property to Mrs Haines but the trustees contested the order.

The decision was upheld by a court in Birmingham in December last year, but Mr Haines’ trustees successfully appealed the decision at the High Court, which ordered Ms Haines to surrender half of the proceeds from the property.

Mr Kanghure told the court today: “The decision of the learned judge has far-reaching implications for the treatment of matrimonial orders made by consent or following contested hearings.”

He said that up to five years after a divorce settlement, should a husband be declared bankrupt, the wife will have no defence to an application by the husband’s trustees to set aside the order made by a matrimonial court.

The hearing continues.

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