A summary of BT v VT [2015] EWHC 2727 (Fam)

  • Gwyn Evans Author: Gwyn Evans
  • Date: 09 Oct, 2015
  • In: Articles
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BR v VT [2015] EWHC 2727 (Fam)

Summary: Applying FPR 2010 rule 20.2(1)(c)(v), and s 33 FLA 1996, in circumstances of the parties’ pressing debts and revenue deficit the court made an interim order for sale of the matrimonial home in which the wife and two children remained living.

Introduction: Mostyn J considered an application by a husband in ancillary relief proceedings for: -

  1. an interim order for the termination of the wife’s rights of occupation under s 33 FLA 1996 of the matrimonial home in which the wife and children were living;
  2. a supplementary order under § 1 of schedule 4 to the FLA 1996 removing the wife’s home rights notice, and
  3. an order for vacant possession. 

The husband did not seek an interim order for sale per se as the matrimonial home was in his sole name (§ 24).

Jurisdiction for interim order for sale

There are three procedural routes (§ 2): -

1)s 17 of the Married Women’s Property Act 1882 (“MWPA”);

2)s 13 and 14 of the Trusts of Land and Appointment of Trustees Act 1996 (“TOLATA”) (so long as both parties have a beneficial interest);

3)FPR 2010 rule 20.2(1)(c)(v), the counterpart to CPR 1998 rule 25.1(1)(c)(v).

However an order under s 24A Matrimonial Causes Act 1973 is barred “during the pendency of the proceedings, save as an adjunct to a legal services payment order” (§ 3).

The s 17 MWPA Route

The court considered the judgment of the Court of Appeal in Wicks v Wicks [1998] 1 FLR 470, in which Ward LJ had stated that “the power to order a sale of the former matrimonial home will not include a power to order possession of it”. The court was “sure that Ward LJ did not mean this literally” (§ 5), in light of the decision of “a strong Court of Appeal” in Short v Short [1960] 1 WLR 833, in which “all three Lords Justice were abundantly clear that the court had power under section 17 to order [a spouse] to give up vacant possession” (§ 5).

The TOLATA route

In Miller-Smith v Miller-Smith [2009] EWCA Civ 1297 at § 16 Wilson LJ explained that the conjunction of s 13 and 14 “enabled the court in effect to order that a beneficiary should give vacant possession of land”

TOLATA bypassing s 33 FLA 1996?

Mostyn J expressed a “respectful difference with the view of Wilson LJ” in Miller-Smith that “if the claim for interim relief is formulated under TOLATA then the exercise under section 33 of the 1996 Act can be bypassed” (§ 9).  That view had been founded upon “an incorrect concession by counsel” (§ 9) in Miller-Smith, and “if, as it seems to me, the procedural powers under the MWPA and TOLATA had been seen to be identical then I believe that Ward LJ’s view would have been followed (indeed had to be followed) in Miller-Smith” (§ 9). 

However this was “not likely to be of much more than academic interest given [Wilson LJ’s] statement that ‘it would be surprising if an order that in effect a spouse should give vacant possession of a matrimonial home under TOLATA were to be made in circumstances in which the applicant could not have secured an occupation order’ ” (§ 23 of Miller-Smith cited at § 10).

Requirement to consider s 33 FLA 1996

Mostyn J “wholeheartedly” agreed with Ward LJ in Wicks that “if the court has before it an application by one spouse for an interim order for sale of a piece of property (howsoever formulated), and that piece of property is the matrimonial home occupied by the other spouse, then the court cannot order vacant possession of it (whether under s 17, TOLATA or procedural rules) without first undertaking the exercise required by section 33 of the Family Law Act 1996”.

“[To] do otherwise would be to by-pass specific legislation on the point and to fall foul of Lord Hailsham’s proscription” (§ 7) in Richards v Richards [1984] 1 AC 1974 that “the result of a particular application cannot depend on which of two alternative statutory provisions the applicant invokes” (at 199H).

Mostyn J considered that “an order for interim sale cannot be made unless I am satisfied that the wife’s home rights should be terminated pursuant to an order under s 33(3)(e) of the 1996 Act applying the evaluative factors in section 33 (6)”

Facts: The parties married in 1998 in England, and separated in August 2014, the husband then moving out into rented accommodation.  Following a few years in California, the parties returned to England and in 2011 purchased the matrimonial home in North London, in which they lived with their two children aged 14 and 10.  Both children were being privately educated.  

The home was charged with a mortgage of c. £1.2m. 

The husband’s mother, aged 82, lived in an annex at the bottom of the garden, and she in turn had contributed c. £517,500 to the purchase of the home via a formal loan agreement involving her daughter, the husband’s sister.  This loan was found to be a real debt (§ 31).

Despite the home now being worth c. £2.47 million, the sum of the parties’ realisable assets and actual liabilities left a residue of just £105,864 (§ 27). 

In the year since separation a large sum of the husband’s money remained unaccounted for (c. £158,000) (§ 16), the court criticising his “reckless and irresponsible conduct” (§ 33).  Considerable sums (c. £167,000) were due to HMRC  and legal fees of £310,000 remained unpaid.  The position of the father’s mother, who remained at the matrimonial home with the wife was “very unhappy” (§ 30), she describing herself as being “like a prisoner in [her] own home” (§ 30). 

The wife had made applications under s 8 Children Act 1989 for a specific issue order (education in USA) and leave to remove the children to California.  Following a hearing in August 2015, the applications had been dismissed on the basis that they were too imprecise. 

The wife had initially agreed to a sale of the matrimonial home, but had changed her mind shortly after the Children Act proceedings had concluded.  Mostyn J stated that “the wife is to be criticised for reneging on her clear agreement to sell and then sticking her head in the sand like an ostrich” (§ 33).

The court found that the parties “are in a position of serious revenue deficit before a penny has been spent on meeting their day-to-day living expenses or those of the children … If the position continues then debts will mount and bankruptcy looms” (§ 29).

Decision: The court considered s 33 (6) FLA 1996: -“There is no alternative but that the home must be sold as soon as possible, and for this purpose the wife’s home rights must be terminated. Only in this way can the pressing debts, most importantly to HMRC, be paid and the revenue deficit eliminated. The future housing of the parties will have to be in rented accommodation”

The order imposed “financial sanity” on this family, “needed for the health, safety and well-being of the parties and their children as the alternative is insolvency with all the psychological damage that that entails” (§ 35).

The court ordered the wife’s rights of occupation to be terminated and that her home rights notice be vacated. The “positive order for the sale of the home” was made pursuant to FPR rule 20.2(1)(c)(v) (§ 36). 

The court stated that it would rule on maintenance for the wife if the “senior experienced counsel” involved “could not agree matters” (§ 37).