Section.37 of The Matrimonial Causes Act (1973) is the key piece of legislation. Here are the main questions and answers:
When can I apply under section 37?
If there is a existing divorce petition and application for financial relief (Court procedure). The court will expect you to show clearly that your spouse’s intention is to dispose of assets in order to defeat (which includes prejudicing) your financial claims.
Which assets can I protect?
Protection is only available to prevent your spouse from disposing of assets which they either own or have a “beneficial interest” in ( which means basically something which he or she is entitled to, even though not owned it legally). You cannot rely on s.37 in respect of property which does not yet exist or which the other party may become entitled to at some future date i.e. inheritance or a bonus that is about to be paid (but see below for the remedy here).
What can the court do?
The court can intervene at two stages. First, if it is persuaded your spouse is about to dispose of assets, it can grant an injunction preventing him or her from doing so. The order would then be served on your spouse and anybody else who may need to know (banks, building societies, companies that he or holds shares in etc) Secondly, the court can undo a disposal which has already taken place. This ‘undoing’ exercise is known as “setting aside” a disposal. You can apply to set aside disposals that are made before you have reached a financial settlement or ones made after with the intention of preventing you from enforcing the order.
As you can imagine, there are situations where an aggrieved husband or wife may sell assets to somebody who has no knowledge of their underhand motives. When considering whether or not to set aside a transaction, the court will need to balance your rights against those of the person who has received the asset. Generally speaking this means the court will not set aside the sale of an asset to a buyer who acted in good faith, had no knowledge of the intention to dispose of assets and who paid full market value for the asset. To avoid this, there are measures you can take to alert any would be buyer, particularly in relations to property.