Arrears of periodic maintenance payments ordered in matrimonial proceedings
A wife (“W”) presented a petition for bankruptcy against her husband (“H”) based on arrears of periodic payments of maintenance pending suit ordered by the Family Court in matrimonial proceedings. At issue was whether such arrears were a debt on which a bankruptcy petition might be presented and, if so, whether the Court ought to make a bankruptcy order on a petition founded on such a debt.
Held, dismissing the petition, that, inter alia:
The debt relied upon by W was not provable in H’s bankruptcy. Arrears of periodic maintenance payments were not provable because they were incapable of valuation, being subject to an unfettered power of variation. Further, there was nothing in the Bankruptcy (Amendment) Ordinance 1996 which evidenced any legislative intention to abrogate this rule.
However, to found a petition, a debt did not need to be provable in bankruptcy. In the context of the Bankruptcy Ordinance (Cap. 6), W was a “creditor” of H. The debt due to W was “for a liquidated sum” payable at the time her petition was presented, even though for the purpose of proving in bankruptcy its value might be too uncertain by reason of its susceptibility to variation and discharge at the discretion of the Family Court. Accordingly, the debt owed to W was capable as a matter of law of founding a bankruptcy petition against H.