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How BR v VT affects interim orders for ancillary relief

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24th November 2015

1. In ancillary relief (financial order) proceedings, does the Family Court have jurisdiction to make an interim order for sale of the former matrimonial home in which one of the spouses continues to live with the children?
2. If so, what is the basis of that jurisdiction?
3. Must the court, prior to making any such order, be satisfied that the home rights of the occupying spouse be terminated pursuant to an order under s 33 Family Law act 1996?

In BR v VT Mostyn J ordered the sale of a matrimonial home in which the wife and children were living, but on an interim basis – prior to the making of the final order. What can we learn from this, and how should we be advising our clients?

My full case summary of the judgment was published on Family Law Week and may be found here:

Common issues arising on interim applications for sale

Although the court is empowered under section 24A Matrimonial Causes Act 1973 to make an order for sale of property, such an order may only be made on or after the making of orders for: –

• periodical payments (secured or unsecured), or
• lump sum(s) under section 23, or
• property adjustment under section 24, or
• legal services payment under section 22ZA.

Therefore the power under s 24A is unexercisable in many ordinary disputes at an interim stage, as most of the orders above are usually only made at a final hearing.

Secondly, if the property is the former matrimonial home, and if there are children, then the occupying spouse will likely be occupying the former matrimonial home with the children: the court would be being asked to oust the family from their home prior to the proceedings having been finally determined.

Furthermore, if the home is in the sole name of the non-occupying spouse, then the occupying spouse is likely to have registered at the Land Registry home rights against the property (Rule 82 Land Registration Rules 2003, Part IV Family Law Act 1996), or to have occupation rights and home rights by virtue of an order made under s 33 Family Law Act 1996.

In BR v VT, Mostyn J agreed with Ward LJ in the Court of Appeal in Wicks v Wicks [1998] 1 FLR 470, that in those circumstances then the court must, before ordering vacant possession of the home, undertake the exercise required by s 33 Family Law Act 1996.

Finally, there are likely to be arguments about preservation of assets on an interim basis, and, practically-speaking, the most straightforward way of preserving the matrimonial home is for one or other of the parties to live in it.

Therefore an interim order for sale is not a straightforward matter.

Effect of Mostyn J’s decicision in BR v VT

Mostyn J has clarified the law, and resolved the tension inherent in the two Court of Appeal decisions of Wicks v Wicks [1998] 1 FLR and Miller-Smith v Miller-Smith [2009] EWCA Civ 1297.

Jurisdiction for interim orders for sale of property

The court identified the three jurisdictional routes for interim orders for sale of property (including the matrimonial home): –

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).

The court affirmed the principle 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). “[To] do otherwise would be to by-pass specific legislation on the point and to fall foul of Lord Hailsham’s proscription [in Richards (supra)]” (BR v VT § 7).

The tension between Wicks and Miller-Smith

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).

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 Family Law Act 1996

The court considered that “an order for interim sale cannot be made unless [it is] 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)”.

These are:

• housing needs / housing resources of each party and any relevant child;
• the parties’ respective financial resources;
• the likely effect of any order or no order on the health, safety or well-being of the parties and of any relevant child; and
• the conduct of the parties in relation to each other and otherwise.

What significance does this decision have for Family lawyers?

There are likely to be more interim applications for orders for sale in ancillary relief proceedings. Few lawyers hitherto would have advised their clients of any great prospects of success were such an application to be made if the property in question was the matrimonial home in which a spouse and the children remained living.

Yet it is clear that in a case such as this, where the position is one of “serious revenue deficit” and “bankruptcy looms” there may be “no alternative” to an interim sale of the matrimonial home (§ 29 and 35).

Furthermore, in straitened financial circumstances in a falling market (by way of contrast to the situation in early Autumn 2015!) such an order may prove all the more necessary.

However, practitioners now have crystal clear guidance that it is not possible for the court to dodge the discretionary exercise of s 33 (6) Family Law Act 1996, and therefore these factors must be addressed in the witness statement accompanying any such application.

The role of s 33 (7) Family Law Act 1996?

Although Mostyn J omitted explicitly to mention the significance of s 33 (7) Family Law Act 1996 (the familiar “balance of harm” test), it is settled law that the court has to consider s 33 (7) prior to considering s 33 (6) (see judgment of Thorpe LJ in Chalmers v Johns [1999] 1 FLR 392 at 396).

The “significant harm” referred to in s 33 (7) is not of course limited to incidences of domestic violence – see Re L (Occupation Order) [2012] EWCA Civ 721 at § 21, and Dolan v Corby [2011] EWCA Civ 1664 at § 27.

The continuing “interim” role of s 24A Matrimonial Causes Act 1973

With the advent of Legal Services Payment Orders under s 22ZA MCA 1973, this decision serves to remind practitioners that an interim order for sale may be made under s 24A MCA 1973 at the time a Legal Services Payment Order is made.

What next?

It is notable that the underlying jurisdictional basis for this particular decision involved the use of FPR 2010 rule 20.2(1)(c)(v) (see § 36). This provides that the court may grant as an interim remedy an order “for the sale of relevant property which is of a perishable nature or which for any other good reason it is desirable to sell quickly”. Relevant property is defined as “property (including land) which is the subject of an application or as to which any question may arise on an application”.

The court was not required to refer to any previous reported decisions on interim sale under this rule: there aren’t any! The references to Wicks and to Miller-Smith were to the use of different statutory remedies to achieve the same purpose.

Therefore this decision perhaps heralds the advent of an era in which there will be increased use by the court of the interim provisions of rule 20.2(1)(c)(v), with occupying parties shielded by the discretionary provisions of Family Law Act 1996 s 33 (7) and (6).

A version of this article originally appeared on LexisNexisPSL.

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