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Cobb J reviews law on interim orders for sale of parties' former matrimonial home

Wife’s appeal against interim order for sale allowed

In WS v HS [2018] EWFC11 Mr Justice Cobb has allowed a wife's appeal in financial remedy proceedings against an interim order for sale of the parties' former matrimonial home.

WS ('W') and HS ('H') were married for 25 years. They had three children, two of whom were still in secondary education. After the parties separated, W had remained in the former matrimonial home ('the FMH'), and H had moved into the parties' holiday home.

The parties were in the very early stages of financial remedy proceedings, not yet having attended a First Appointment. They had engaged in voluntary exchange of Forms E in which each party requested a final order for sale of the FMH.

The FMH had been on the market for approximately two years. The original asking price was £950,000, but in autumn 2017 the parties reduced it to £850,000. In October 2017, the parties received an offer to purchase the FMH for £785,000. H wished to accept the offer; W did not.

H issued financial remedy proceedings and made an application under Part 18 for an interim order for sale of the FMH. W opposed H's application on the grounds that i) the FMH should be retained until the child at the local day school completed her A-Levels, and ii) a sale at the price offered would represent a sale at a significant undervalue [10].

At first instance the District Judge concluded that there was a "good reason" why it was "desirable" to sell the FMH and made an interim order for its sale [15]. W sought permission to appeal this decision.

On appeal Mr Justice Cobb reviewed the statutory sources for the court's jurisdiction to make an interim order for sale [27]- [30].

i) Under section 24A of the Matrimonial Causes Act 1973 ('MCA 1973'), such orders are limited to giving effect to a legal services payment order.  

ii) Under section 17 of the Married Women's Property Act 1882 ('MWPA 1882'), the court has jurisdiction to make an order for sale and an order for vacant possession, although, the court may only make the latter order when it has undertaken the discretionary exercise under s.33(6) of the FLA 1996 (per Mostyn J in BR v VT [2015] EWHC 2727 (Fam)).

iii) Under section 13 -14 of the Trusts of Land and Appointment of Trustees Act 1996 ('TLATA 1996'), the court may make an order for sale and vacant possession.

He then set out the relevant case law [31] – [43]:

i) In Wicks v Wicks [1998] 1 FLR 470, the Court of Appeal concluded that the court had no power to grant an interim order for sale pursuant to the procedural - rather than substantive - rules (Rules of the Supreme Court and the Family Proceedings Rules 1991) which were then in force.

ii) In Miller Smith v Miller Smith [2009] EWCA Civ 1297, the Court of Appeal upheld an interim order for sale made under TLATA, although Wilson LJ appeared reluctant to endorse the use of TLATA in advance of the final hearing of a financial remedy application.

iii) In BR v VT, Mostyn J held that on an application for an interim order for sale (howsoever formulated), the court may only make an order with vacant possession where it has undertaken the exercise required by section 33 of the FLA 1996 to terminate a party's occupation rights.

iv) In Joy v Joy [2015] EWHC 455 (Fam), an order for the sale of the husband's Bentley was granted as an enforcement measure, rather than as an interim order for sale pursuant to s.24A of the MCA 1973.

v) In Goyal v Goyal [2016] EWCA Civ 792, McFarlane LJ stated that, "there is no residual or inherent jurisdiction available for deployment to fill in any perceived gaps or to meet what the court may see as the justice of the case if that outcome cannot be achieved by an order within the statutory scheme".

Having reviewed the statutes and authorities, Mr Justice Cobb pointed out that the only substantive claim before the court was one made under section 23 and 24 of the MCA 1973, which specifically bars the interim relief claimed [46]. He was therefore unable to conclude that H's application, brought under a generic procedural rule, could deliver a result which is expressly prohibited by the statute [44] – [47].

The judge explained that it was open to H to make an application for an interim order for sale under MWPA 1882 or TOLATA 1996 [48]. However, such an application has to be made formally, and cannot be deemed to have been made, or inferred [49].

Mr Justice Cobb further held that, even if the court had jurisdiction pursuant to FPR r.20.2(1)(c)(v), it did not have the power to order the delivery up of vacant possession. Not only had the trial judge failed to undertake the exercise required under section 33 of the FLA (as carried out by Mostyn J in BR v VT), but even if he had, this could not terminate W's occupation rights, which arose from her legal and beneficial interest in the FMH, but only 'prohibit, suspend or restrict them' (s.33(1)(a)(i) FLA 1996) [51] – [52].

Furthermore, the judge expressed "grave misgivings" about purporting to terminate a wife's rights of occupation on the basis of a deemed application under the FLA 1996, in accordance with the approach set out in BR v VT [53].

Finally, the judge explored the court's approach to an application under FPR r. 20.2(1)(c)(v), assuming that the court has jurisdiction and the application has been properly made; the applicant has to satisfy a two-stage test by establishing that there is a "good reason" for an interim sale and that it is right in all the circumstances for the court to exercise its discretion [54]- [59].

Mr Justice Cobb granted W's appeal and set aside the interim order for sale.

For the judgment, prefaced by a more detailed summary (from which this news item is derived) by Georgina Howitt of 1 Hare Court, click here.

5/3/18