Gudmundsson vs Lin

This case involved an appeal by Mr. Audun Gudmundsson against a financial remedies order, complicated by his subsequent bankruptcy.

TLDR:

• Gudmundsson appealed against a financial remedies order requiring the transfer of his share in the family home.
• His bankruptcy, declared shortly before the order, complicated the case.
• The court had to address the legal implications of the bankruptcy on the financial remedies order.
• The appeal was allowed, and the original order was set aside.
• The court provided for a new order ensuring the financial remedies were on a sound legal footing.

The appellant, Mr. Audun Gudmundsson, and the respondent, Ms. Hsiao-Mei Lin, were involved in a dispute over a financial remedies order made on 4 March 2020. The order required Mr. Gudmundsson to transfer his half share in the family home (FMH) to Ms. Lin. The FMH had an agreed value of £1.5 million, making Mr. Gudmundsson's share worth £750,000. However, Mr. Gudmundsson was declared bankrupt on 26 February 2020, complicating the enforcement of the order.

The appeal was granted permission by Knowles J on 14 August 2020. Mr. Gudmundsson, representing himself, did not pursue the appeal actively due to the bankruptcy. However, it was necessary for the court to set aside the original order and substitute a fresh decision to ensure the final financial remedies order was legally sound.

Mr. Gudmundsson was born in Iceland and described himself as a businessman and entrepreneur. Ms. Lin, of Taiwanese origin, had a successful career as an artist before becoming a full-time mother. The couple married in March 2009 and purchased the FMH in joint names for £600,000. Mr. Gudmundsson paid a deposit of £300,000, and Ms. Lin later paid off the remaining mortgage from the proceeds of a flat she owned before the marriage.

The couple separated in January 2017, and a decree absolute was pronounced in April 2020. The financial remedy proceedings were complicated by Mr. Gudmundsson's opaque financial presentation, involving complex trust and business interests. The judge found it challenging to determine the true nature of Mr. Gudmundsson's financial situation.

Mr. Gudmundsson's bankruptcy added another layer of complexity. He failed to inform the court and Ms. Lin about the bankruptcy petition and order, which significantly impacted the financial remedies order. The court found that by the time the financial remedies order was made, Mr. Gudmundsson's assets, including his share in the FMH, had vested in the trustees in bankruptcy.

The court concluded that the original order requiring Mr. Gudmundsson to transfer his share in the FMH to Ms. Lin was invalid. The judge noted that the bankruptcy estate included all of Mr. Gudmundsson's assets, and the court had no power to order the disposition of these assets. The court also acknowledged that Ms. Lin had applied to annul the bankruptcy, but this application was dismissed.

The court allowed the appeal, discharged the original order, and recorded that Ms. Lin owned 50% of the FMH beneficially. The court provided that upon the sale of the FMH, any surplus from Mr. Gudmundsson's former share, after paying the trustees' costs and creditors, should be paid to Ms. Lin. This decision aimed to reflect the original intent of the financial remedies order and address Mr. Gudmundsson's conduct in concealing his bankruptcy.

The court also ordered Mr. Gudmundsson to return Ms. Lin's paintings, with transportation costs to be shared equally. Ms. Lin's request to vary the nominal periodical payments order was declined due to a lack of updated financial information.

The judgment was not anonymized, as much of the material was already public, and the court found no compelling reason to do so.

Legal representatives: The appellant appeared in person, Sapna Shah for the Respondent, Steven Fennell for the Trustees in Bankruptcy.

Judicial Panel: Mr. Justice Peel

Case Citation Reference: [2024] EWHC 1576 (Fam)