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Khalil v Bishieri [2007] EWCA Civ 837

Appeal by wife against an order for sale of the matrimonial home. Appeal allowed.

The case turned on whether the wife should be allowed to take the risk of failing to meet mortgage payments. The judge at first instance and the circuit judge had both concluded that the wife could not afford the probable repayments but that was on the basis that she would ask for an increase in periodical payments. Before the Court of Appeal the wife changed tack and argued that she could afford an interest only mortgage and that to stay in the matrimonial home was in the best interests of the children as they had been settled there for a long time. Bennett J agreed with this argument in that any harm to the children had at least been delayed.


Case No: B4/2006/2544
Neutral Citation Number: [2007] EWCA Civ 837
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Tuesday, 10th July 2007



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KHALIL (Appellant)

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BISHIERI (Respondent)

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(DAR Transcript of
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The appellant appeared in person.

Mr C Naish (instructed by Messrs John Boyle & Co) appeared on behalf of the Respondent.

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Mr Justice Bennett:
1. This is an appeal by Dr Khalil, to whom I shall refer to as "the wife", from an order of HHJ Vincent of 22 September 2006, whereby he dismissed her appeal from the order of District Judge Griggs of 11 April 2006. The appeal to this court is by way of a second appeal under Section 55 of the Access to Justice Act 1999, permission having been given by Wilson LJ on paper.

2. Before the District Judge, Dr Khalil and the husband were both represented by counsel. Both gave evidence and the District Judge made the following order. First, he directed that the matrimonial home in Truro in which the wife together with the two children, Sylvia and Joseph, lived should be sold. Second, the proceeds of sale after discharge of the mortgage in favour of the Halifax Building Society, less costs of sale be paid to the wife. Third, the husband was to pay the wife periodical payments at the rate of £100 per calendar month until completion of the sale of the former matrimonial home and thereafter at the rate of £300 per calendar month for a period of two years. Fourth, upon the expiry of that two year period the wife's claims for periodical payments should stand dismissed, the judge ordering that the wife should not be entitled to apply to extend the period or make any further application for ancillary relief. Upon expiry of that period the wife's claim for ancillary relief was to be dismissed with the conventional order under the Inheritance (Provision for Family and Dependents) Act 1975 that she could not take proceedings against her husband's estate should he predecease her. Equally the husband's claims in life and in death were dismissed. Finally, the District Judge made a pension sharing order in favour of the wife, and the husband was ordered to pay the children's basic school fees and extras up to a cap of £100 per term.

3. The wife was dissatisfied with the District Judge's order. Acting in person she filed an appeal taking issue with the order for the sale of the matrimonial home, the term of two years for the periodic payments, the pension sharing order and the quantum of periodical payments for school extras.

4. The wife's appeal came on for hearing before HHJ Vincent on 22 September 2006. Having heard the wife in person and Mr Christopher Naish, the husband's counsel, the judge gave judgment in which he rejected all the wife's submissions and dismissed her appeal.

5. On 5 December 2006 the wife's Notice of Appeal to this court was received by the Court of Appeal Office. At section 5 the wife stated that she wanted to appeal that part of HHJ Vincent's order refusing to transfer the matrimonial home into her sole name. She gave as her ground that she could redeem the Halifax mortgage and pay the instalments under any remortgage. She said that she had an offer from the HSBC dated 14 August 2006. It seems to me from reading the observations of Wilson LJ that he gave permission to appeal solely upon the ground as to whether it was fair in all the circumstances that the house should not be transferred to the wife and that it should be sold.

6. By the time that the matter came before the District Judge in January 2006, the husband had left the matrimonial home and purchased a property in his sole name. He continued to pay the mortgage on the matrimonial home and £100 per calendar month by way of interim maintenance.

7. The wife's case before the District Judge is not only clearly put in her counsel's written submissions, but it is made plain in the District Judge's judgment. The wife, before the District Judge, sought a transfer of the former matrimonial home into her sole name with the husband paying the mortgage of £450 a month. The wife also sought an order for periodical payments of £300 per calendar month and a pension sharing order. The husband's opening position was that the home should be sold and that the wife should use the net proceeds of sale to rehouse herself and the children. During the course of the hearing his position was modified ie. the wife could remain in the matrimonial home, he would pay the mortgage payments for five years only on condition that he could remortgage the home, and all his payments during that five year period, estimated to be approximately £18,000, would be paid to him when the house was sold. The wife rejected that offer.

8. During the course of his judgment the District Judge made a number of findings adverse to the wife. The wife's case on her employment prospects was that she was effectively unemployable. That is to be seen from page 255 of the District Judge's judgment. The District Judge came to the conclusion that it would take some time for the wife to obtain employment but that she was likely to do so in about eighteen months or two years time when she would be able to earn something like £43,000 per annum gross in a hospital. However, the District Judge decided that the matrimonial home should be sold and the net proceeds given to the wife from which she could purchase a suitable home for herself. He made an express finding that the only way she could retain the home was with the husband paying the mortgage.

9. After the hearing before the District Judge the wife obtained several quotations from the HSBC to remortgage the matrimonial home. That would have entailed her paying very approximately about £350 or £380 per calendar month under an interest only mortgage. In April of this year the HSBC put forward its latest offer in similar terms, though with slightly higher payments because of the increase in interest payments, which the wife accepted. Before the matter came before the Circuit Judge, HHJ Vincent, on 11 September District Judge Mitchell ordered the wife to file and serve a copy of the mortgage application that led to the mortgage offer. The wife, having refused or having failed to produce that document, was ordered to do so by the court and it is an undoubted fact that she did not do so.

10. Before HHJ Vincent it seems to me that the matter was, so far as the wife is concerned, rather confused. It is plain that she changed her case. Whereas before the District Judge it was clear that she was saying she could not afford to pay the mortgage because she asked for her husband to pay it, when she came in front of HHJ Vincent her case was that she would be able to take on the mortgage. However, there was unfortunately, or appears to have been, nothing in front of HHJ Vincent to persuade him that she could indeed afford a mortgage. No doubt for that reason HHJ Vincent felt constrained to dismiss the appeal.

11. When the matter came on before us, Mr Naish wanted to find out what really was the scope of the wife's appeal. After some discussion with him and Dr Khalil, the appeal proceeded upon the basis that what the wife really sought was a transfer of the home into her name. She put before us documents, some of which were unavailable in front of HHJ Vincent. In particular she put in front of us a P60 for the tax year ended 5 April 2006 which on the face of it shows that in that tax year she earned just over £10,000. She tells us today that she is in receipt of a salary of £362 per calendar month for four sessions every week working as a doctor in either clinics or elsewhere. Furthermore, she says that she has done and is doing a lot of locum work.

12. When asked in the course of submissions by my Lord, Thorpe LJ, what between now and the end of June next year she would hope to earn, she put forward a figure of £1,000 per calendar month from all sources of work as a doctor. She told us that she is contributing to a homemaker plan paying £350 per month which will hopefully in years to come produce sufficient to redeem the HSBC mortgage of £80,000, with which she wants to take out to pay off the Halifax mortgage, and remain in the former matrimonial home. Accordingly, if she were to take out the interest only mortgage at about £350 per month, she would be committing herself to a total bill of some £700 per calendar month, or £8,400 per annum for the purposes of staying together with her two children in the former matrimonial home.

13. In the course of his written reasons Wilson LJ said this:

"Before [the Circuit Judge] [the wife] sought to adduce fresh evidence that, by remortgage, she could release [the husband] from liability under the mortgage on the home with the result that, apparently without any prejudice to [the husband], she could retain the home for the children and herself rather than suffer the sale (even if in that event she could be its purchaser, which would be an absurd waste of family money in terms of estate agents' fees and legal costs). Are the [Circuit Judge]'s powers on appeal really are now so limited that he is (in his words) "stuck with" an inability to interfere unless, on the material available to the [District Judge], the latter's decision can be categorised as "perverse"? This either raises an important point of principle or at least represents a compelling reason for this court to hear a second appeal.

"So why will [the husband] not consent to variation of the order for sale to permit [the wife]'s retention of the family home? Is he using the right (conferred on him, rightly or wrongly, by the [Circuit Judge]) to give or withhold consent as a bargaining chip to gain advantage on unrelated matters."

14. During the course of submissions those very points were put to Mr Naish. He answered in two ways. First, he said that if the wife is unable to maintain the mortgage payments to HSBC this could lead to a forced sale with the wife and the children having to leave the matrimonial home for another home, with what could be distressing circumstances, and that that would not be in the interests of the children. Second, he said that it is open to the wife in those circumstances to return to the court in order to ask for an increase in the spousal periodical payments from the husband to the wife so that she could meet the mortgage payments and not be evicted from the matrimonial home. He pointed to the findings of the District Judge that, as at least at that date, the wife was unable to make the mortgage payments. So his submission was that it would not be right, even at this stage, on the submissions and the evidence presented by Dr Khalil for there to be any different order than that which the District Judge made.

15. So far as the first reason is concerned, the wife says that she is confident that she can maintain the mortgage payments, that she would not enter lightly into a contract with HSBC to remortgage the property unless she was confident that she could maintain those payments and that she is keen to remain in the home because it has been the children's home for a long time. Thus it would be in their interests to stay. If she is forced to move now she would say that that is going to disrupt the children in any event, but if she has the chance to remain in the former matrimonial home at least she has the chance to obviate the risk of her not being able to comply with the mortgage payments and of the home being sold.

16. So far as the second reason is concerned I believe, having heard the submissions of Dr Khalil, that she was saying to us that if she fell, if I may put it like this, on hard times or if her hopes of the anticipated earnings do not bear fruition, that she will not return to court to seek from her husband an increase in her spousal maintenance to cover in whole or in part the mortgage payments.

17. We are presented with a different, indeed very different, position that was in front of either the District Judge or indeed HHJ Vincent. For my part, I see no prejudice to the husband if the wife is permitted to remortgage the home and stay there. True it is that the wife may not be able to maintain the mortgage and thus will have to leave, but under the present order that is what she would have to do anyway and so under the wife's proposals any difficulties for the children are being postponed.

18. Speaking for myself I would propose that if the home is to be transferred to Dr Khalil she should not seek an increase in the spousal maintenance if she is unable to maintain the proposed mortgage payments to the HSBC. If that were in some appropriate way written into the order then it seems to me to be that that is likely to obviate any risk in the future to the husband having effectively to underwrite the wife for the mortgage repayments.

19. So speaking for myself, the way I see the matter now is that the wife wishes to take the risk of taking a transfer the home into her sole name and paying under the new mortgage. It would seem to me to be fair that she should be allowed to do that on the terms that I have suggested.

20. So for those reasons I would allow the appeal.

Lord Justice Thorpe:
21. I agree with the pragmatic conclusion proposed by my Lord and would invite Mr Naish to address us as to the consequential amendments to the order.

Order: Appeal allowed; no Order for costs.