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Home > Judgments > 2006 archive

Lake v Lake [2006] EWCA Civ 1250

Application for permission to appeal, with appeal to follow, an order for a transfer of tenancy. Permission to appeal granted but appeal dismissed.

The case is of interest because counsel for the husband argued that when a tenancy is transferred under para 5, schedule 7 of the Family Law Act 1996 conduct should not be a factor in contrast to an occupancy order under s33 of the same Act. Thorpe LJ, in granting permission to appeal, found that the proposition was arguable but concluded that the judge was right to consider the facts in the round using his discretion under s25 of the MCA 1973.

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B4/2006/1239

Neutral Citation Number: [2006] EWCA Civ 1250

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM BOURNEMOUTH COUNTY COURT

(HIS HONOUR JUDGE BOND)

Royal Courts of Justice

Strand

London, WC2

Thursday, 20th July 2006

B E F O R E:

LORD JUSTICE THORPE

LORD JUSTICE WALL

LAKE

CLAIMANT/APPELLANT

- v -

LAKE

DEFENDANT/RESPONDENT

(DAR Transcript of Smith Bernal Wordwave Limited 190 Fleet Street, London EC4A 2AG Tel No: 020 7404 1400 Fax No: 020 7831 8838 Official Shorthand Writers to the Court)

MR J WARD-PROWSE (instructed by Jacobs & Reeves) appeared on behalf of the Appellant.

MR G FAWCETT (instructed by Trevanions) appeared on behalf of the Respondent.

J U D G M E N T

(As Approved by the Court)

Crown copyright©

1. LORD JUSTICE THORPE: There was a hearing before HHJ Bond in the Bournemouth County Court on 16 May 2006. It was a hearing of an application brought for the transfer of a tenancy following a divorce between the parties and resulted in an order for transfer. It is plain from the written submissions of Mr Ward-Prowse, who appeared for the husband below, that he set out the statutory material carefully for the judge's consideration but it was only after judgment, in pursuit of an application for permission to appeal, that Mr Ward-Prowse advanced an interesting and plausible argument on the construction of the relevant provisions of the Family Law Act 1996, particularly contrasting the ambit of the discretion vested in the judge under section 33(6) of that Act and the discretion vested in the judge under paragraph 5 of schedule 7 of that Act.

2. HHJ Bond refused permission but said:

"If Mr Lake wishes to pursue his appeal, it would be right for this matter to be ventilated before the Court of Appeal on an application for permission there and that court can then decide in the circumstances what course it wishes to take."

3. With that encouragement the application was brought by Mr Ward-Prowse and on 21 June my Lord ordered an oral hearing on notice with appeal to follow if permission is granted. This point of construction is on any view clearly arguable and I would have no hesitation in granting permission.

4. In order to demonstrate that assessment I turn to the relevant provisions, starting with section 33. Section 33 of the statute is headed "Occupation Orders" and it defines the circumstances in which the court may make an order in favour of one party ousting the other from occupation. The court's task is defined by subsections (6) and (7). In practice the judge in any case asks himself whether the application is governed by subsection (7), which provides that if it appears to the court that the applicant or any relevant child is likely to suffer significant harm attributable to conduct of the respondent if an order under this section is not made, the court shall make the order.

5. So first the judge asks whether it is a significant harm case, in which case the order becomes mandatory. If the answer to that is no, he then travels to the wider provisions of subsection (6) which reads:

"(6) In deciding whether to exercise its powers under subsection (3) and (if so) in what manner, the court shall have regard to all the circumstances including-

"(a) the housing needs and housing resources of each of the parties and of any relevant child;

"(b) the financial resources of each of the parties;

"(c) the likely effect of any order, or of any decision by the court not to exercise its powers under subsection (3), on the health, safety or well-being of the parties and of any relevant child; and

"(d) the conduct of the parties in relation to each other and otherwise."

6. Mr Ward-Prowse then contrasts the definition of the judicial task if the application is not for an occupation order but for a transfer of tenancy order. That is dealt with under schedule 7, which in paragraph 2 defines the cases in which the court may make an order. The present case clearly fell under paragraph 2(2), which reads:

"On granting a decree of divorce … or at any time thereafter … the court may make a Part II order."

7. A part II order is defined in paragraphs 6 and 7 and the matters to which the court must have regard are regulated by paragraph 5. Paragraph 5 reads as follows:

"5. In determining whether to exercise its powers under Part II of this Schedule and, if so, in what manner, the court shall have regard to all the circumstances of the case including -

"(a) the circumstances in which the tenancy was granted to either or both of the spouses or cohabitants or, as the case requires, the circumstances in which either or both of them became tenant under the tenancy;

"(b) the matters mentioned in section 33(6)(a), (b) and (c) and, where the parties are cohabitants and only one of them is entitled to occupy the dwelling-house by virtue of the relevant tenancy, the further matters mentioned in section 36(6)(e), (f), (g) and (h); and

"(c) the suitability of the parties as tenants."

8. Mr Ward-Prowse's short point rests on the contrast between the legislative inclusion of the conduct of the parties within section 33(6) with the limitation in paragraph 5 to the three heads defined in 33(6)(a), (b) and (c); so, says Mr Ward-Prowse, the judge exercising his power to transfer a tenancy validly considers the housing needs and housing resources, the financial resources of the parties and the likely effect of any order on the health, safety or wellbeing of the parties. Inferentially, Parliament excluded from the judge's discretionary survey the conduct of the parties. Had Parliament intended the judge to bring conduct into account, then paragraph 5 of schedule 7 would have included in subparagraph (b) not only section 3(6)(a), (b) and (c) but also subsection (d). He fortifies that submission by relying on the recent decision of the House of Lords in the case Miller v McFarlane [2006] UKHL 24.

9. In paragraph 65 Lord Nicholls corrected the approach of this court, which had had regard to the conduct of Mr Miller in its assessment of all the circumstances of the case under section 25(1) of the Matrimonial Causes Act 1973. That was unprincipled, said Lord Nicholls, because section 25(2) had inferentially debarred the court from considering any conduct that did not meet the standard defined in subsection (g); namely, conduct that it would in the opinion of the court be inequitable to this regard. In ordinary language that has been construed to be "gross and obvious". So if the conduct is less than gross and obvious, it is not to be brought into the reckoning under the catchall of the circumstances of the case. Of that, Lord Nicholls said:

"This approach, I have to say, is erroneous. Parliament has drawn the line. It is not for the courts to re-draw the line elsewhere under the guise of having regard to all the circumstances of the case."

10. So, says Mr Ward-Prowse, that is precisely the error into which HHJ Bond fell, for in the course of his judgment he recorded Mr Fawcett's submission thus:

"If one looks at all the circumstances of the case quite serious allegations have been made against the husband, many of which he accepts. For example drinking excessive amounts of alcohol, burning some of his wife's clothes, forcing her to stay in the bathroom and breaching undertakings."

11. That the judge accepted that submission is plain from paragraph 42, in which he said:

"My principal reasons for coming to that decision are first of all the evidence that I have about Mr Lake's capacity for being rehoused in the public sector. He is clearly in a far stronger position than is Mrs Lake. Secondly, in looking at all the circumstances of the case, I have regard to the history of the litigation and his behaviour."

12. In conclusion, I accept that Mr Ward-Prowse has demonstrated that the judge had regard to the husband's admitted misconduct in making the order for the transfer of the tenancy. However, I do not accept that that was impermissible. I pay tribute to Mr Ward-Prowse's ingenuity. He has advanced a well-constructed argument. He has reinforced it by reference to recent relevant authority at the highest level.

13. However, the construction seems to me to run counter to all good sense. The judge in the county court has to take a balanced and fair decision as to which of the parties shall have the benefit and enjoyment of a joint tenancy following the dissolution of a marriage. It is an order that will be of permanent rather than transient effect. It is an order that essentially requires the court to have regard to all the circumstances. If the absence of express reference in paragraph 5 to subsection 33(6)(d) were construed as placing such a fundamental limitation on the exercise of the court's discretion, all sorts of practical difficulties would arise as to whether something was or was not conduct.

14. The paragraph from the speech of Lord Nicholls does not for me carry the point home, for the simple reason that the limitation of the judicial discretion exercised under section 25 is to be found within the section itself, whereas there is no express limitation to be found within schedule 7.

15. I simply conclude that if judges are to exercise what is often a difficult and finely balanced discretionary judgment under schedule 7, it is extremely important that they should look at the case in the round and have regard to all relevant circumstances.

16. So on this point of construction I side with Mr Fawcett, who has in his skeleton mounted the contrary argument, and I would dismiss the appeal.

17. LORD JUSTICE WALL: I agree.

Order: Appeal dismissed.