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Mesher Orders in Practice

Richard Tambling, barrister, One Garden Court, reviews the legal and practical issues arising in financial remedies cases where Mesher orders may be the appropriate solution.

Richard Tambling,  barrister, One Garden Court

When Ormrod LJ made his obiter remarks in the Court of Appeal in Harvey v Harvey [1982] 1 All ER 693 stating,

"This is another case which illustrates very aptly the proposition which has been stated many times in this court, that the effect of making a Mesher v Mesher order is simply to postpone the evil day and to avoid facing the facts now." 1

he neatly summed up the obvious and main practical effect of making a Mesher v Mesher and Hall [1980] 1 All ER 126 2 order: the delayed sale of (invariably) the former matrimonial home.

As undesirable as it is to have the parties left waiting for the passage of time before the property that is the subject of the Mesher order is sold, or a party's share realised, nonetheless the Mesher order still plays some part on the financial remedies' stage.

The Mesher order is a postponement of the exercise of a trust for sale of a property followed by division of the proceeds of that sale when the youngest child of the family reaches, commonly, 18 years of age.  The order the court made in Mesher was for the former matrimonial home to be held on trust for sale for the parties in equal shares and for the house not to be sold for as long as the child of the family was under the age of 17 or until further order.  The wife remained living in the home and was required to pay for the outgoings and half of the capital repayments but otherwise lived in the property rent-free.

The percentage share of the proceeds of sale is usually fixed when the order is made but this need not be the case, where, for example, one party's disability makes the future difficult to predict. 3 The Mesher order is, in many ways, similar to the often used, deferred charge mechanism save that the Mesher order operates to hold on trust for sale the net proceeds of sale for later division.  The deferred charge is where one party has the property transferred to him or her and the other party has a charge in their favour which is only realisable upon certain 'trigger' events, such as, for example, the youngest child of the family reaching 18 years of age.

One of the advantages of the Mesher order is that it satisfies the statutory requirement that the court is to give first consideration to the welfare of any child of the family under 18 years of age4.  Additionally, it does not cause any destabilising effect upon the child or the child's carer by forcing a sale of the home at a time that will undoubtedly have been emotionally stressful.  The postponement of the sale at a time when the finances of the parties may be significantly stretched has the benefit of delaying incurring immediate moving costs and other costs associated with the sale of the property.  A Mesher order may also remove the costs involved when transferring the property from joint names 5 to the receiving party and the preparation of the charge to be placed against the property.

'Negative equity' has not been a major feature within the housing market for some years but unfortunately, the economic slump of recent years has contributed to the resurrection of the problem.  In cases dictated by needs and, in particular, housing of carer and the children, a Mesher order may, in appropriate (and perhaps the most dire of) circumstances allow for a deferred sharing of the matrimonial home.  The delay to the sale of the property may allow sufficient time for the market to recover and allow the parties to recover some equity from the property at a later date.  The terms upon which the order is made, might be such that the quantification of the proposed shares reflects the liability (and risk) that the party remaining in the property with the care of the children will have in later years.  However, this must be balanced against the contribution of the party leaving the property in respect of his or her delayed receipt of their share of the former matrimonial home.

In B v B (Mesher Order)6, the court did not adopt the Mesher solution but took the view that the husband was in a position where he was more likely to be able to generate capital than the wife because she would be looking after the child of the family.  The court held that to order otherwise would cause inequality in the outcome.  The advantage to the Husband in obtaining the Mesher order would be comparatively modest when contrasted with the Wife having to re-house herself when the trigger event occurred, placing a considerable financial burden upon her at that time.

A Mesher order also has the disadvantage of keeping the parties linked until their youngest child reaches majority, whereas, a transfer of the property and a charge in favour of the other party is a little closer to obtaining the ideal of a clean break.  A Mesher order need not be disastrous if the parties maintain a reasonable relationship. A Mesher order will require the parties to maintain some communication about, and reach agreement as to, such issues as structural repairs, building insurance and mortgage repayments.  It is only fair, for example, that the spouse who will be seeking to realise their half-share from the equity should also be required to contribute towards the upkeep of the property and contribute towards structural repairs.

One of the major criticisms of Mesher orders is that the parties are left in a state of uncertainty as to whether or not they will be able to rehouse themselves once the proceeds of sale do eventually available7.  For the party having to wait for their share of the matrimonial home whilst not having the benefit of occupation of the property, a Mesher order has a distinct disadvantage.  That party is kept out of their share of the property for a number of years and may be in some difficulty obtaining secure accommodation or the means of acquiring accommodation because of their restricted access to their share of the property in the meantime.  For the party facing the prospect of selling their home once the youngest child turns 18, Thorpe LJ summarised the Court of Appeal's view of Mesher orders, when in Dorney-Kingdom v Dorney-Kingdom 8 where he stated,

"… the form of Mesher order has been criticised in a number of decisions in this court for producing a harsh situation in which the primary carer, having discharged her responsibility to the children, is then left in a position when she is unable to rehouse herself as an independent person, probably at a relatively vulnerable stage of life."

In the circumstances where a Mesher order is appropriate, the quantification of the share of the proceeds of sale need not be equal and may be adjusted to take into consideration the financial difficulties which, for example, the party caring for the children will face when the time comes for the property to be sold.  In Dorney-Kingdom9 (above) Thorpe LJ observed that while one approach (as sought by the husband) was to have particular regard to what the wife's housing needs would be at the stage at which she completes the discharge of her responsibility to the children, that another way of approaching the quantification was to consider to what extent the wife may have to draw upon her own alternative resources to maintain the property.  This was particularly so because the property was not only for her benefit but also for the benefit of the parties' children. While the wife was to be in receipt of CSA payments, the likelihood was that for her to maintain the property she would either have to borrow from commercial lenders or from her family.10  Thorpe LJ summarised the approach to quantification as:

"So I think it is relevant to look not only to the probable cost to the wife of rehousing herself at the end of the children's dependency, but also to the extent to which she may have had to reduce her other capital assets to maintain the property to the date of notional future sale." 11

Great care is required when determining the shares and trigger events in a Mesher order to avoid criticism of discrimination 12 between the parties.  This point is well illustrated by the case of Elliot v Elliot 13 where the district judge ordered that the matrimonial home be sold, another property purchased with the proceeds for the use of the wife and the two children and that upon purchase the wife was to execute a charge in favour of the husband for 45% of the equity.  The charge would be redeemable upon the death or remarriage of the wife, cohabitation by the wife, the wife vacating for more than three months, the wife selling the property, the youngest child reaching the age of 18 or completing full time tertiary education, whichever was the later, or further order of the court. The judge also ordered that the husband was to make periodical payments at a nominal rate to the wife during their joint lives. The judge based the percentage division on the fact that the wife was at a long-term disadvantage because she was to be deprived of an entitlement to a widow's pension. Both parties appealed to the circuit judge who struck from the order the provision for redemption of the charge upon the youngest child attaining 18 years or completing full time tertiary education and also the nominal periodical payments. The husband appealed and the Court of Appeal allowed his appeal stating that the husband should be entitled to his capital once the wife had completed her child caring duties.  The district judge's order was reinstated.  The husband's share remained at 45% with the Court of Appeal accepting that the slight disadvantage the wife would experience and hence the departure from equality was fair in the circumstances.

Mesher orders will not avoid a sale of the property just because one party has particularly strong emotional ties with the property14.  This is particularly so where the party wishing to retain the property could rehouse in less expensive accommodation and allow the other party access to their share of the property.

The trigger events in a Mesher order are usually expressed as the youngest child of the marriage reaching 18 or further order.  The term 'further order' allows a party to apply for the date of the sale to be brought forward provided that it does not alter the intention or body of the order when it was first made.  In Thompson v Thompson15, a Mesher order was made and included the words 'or further order'.  The wife applied to the court to bring forward the date of the sale in order that she could move with the children of the marriage and her new partner to a different area.  The husband opposed the move because it would change the children's schools and his contact with them. He argued that the court had no jurisdiction and that if allowed the order would substantially vary the original order.  At first instance, the court dismissed the wife's application but the Court of Appeal upheld her appeal declaring that the court had jurisdiction and could entertain an application for sale before the prescribed event provided the object was to give effect to the spirit and construction of the original order.

The Mesher order once agreed or ordered by the court requires careful drafting and necessitates consideration of a number of issues.  For example, provision will need to be made for the proposed occupier of the property to be entitled to occupy it to the exclusion of the departing spouse and in addition, whether or not occupation rent is to be paid16.  Suitable provision must be made in relation to matters such as which party is to be responsible for making the repayment and/or interest elements of any mortgage, routine maintenance, decorative repairs and upkeep, payments for buildings insurance and any essential structural repairs that may develop.

In the event that the occupier of the property wishes to sell the property and purchase another, provision will need to be made in the order for such an event and for the costs of sale to be provided for.  The new home will ordinarily be held on the same terms as the previous home.  Provision should be made in the order directing how any gain or shortfall should be dealt with.  Consideration should also be given to, and provision made for, the occupier to purchase the other spouse's interest in the property and there will need to be provision for the valuation of the property and treatment of the costs of sale.

A Liberty to Apply provision should always be included in a Mesher order to enable the parties to restore the matter to court in respect of any issues or disputes about the implementation and timing of the order.

An analysis of the tax position in respect of Mesher orders is beyond the scope of this article.  Suffice to say that, careful thought should be given to the capital gains tax and inheritance tax. implications. Also, payment of occupation rent to the outgoing spouse may lead to an income tax liability for the recipient.

Where is the Mesher order now?  Cursory legal research demonstrates 17 the continued use of the Mesher order in appropriate cases but its use no longer creates quite the same level of debate as it did in the 1970s and 1980s.  Even in its most recent incarnation in Mansfield v Mansfield 18 in the Court of Appeal, the Mesher order appeared in more of a supporting role rather than taking centre stage.  Nevertheless, it still has its part to play in suitable cases on the financial remedies' stage.


[1] Harvey v Harvey [1982] 1 All ER 693 at 698
[2] Mesher v Mesher and Hall [1980] 1 All ER 126
[3] Sakkas v Sakkas [1987] Fam Law 414 Fam D
[4] Section 25(1) Matrimonial causes act 1973
[5] Although it may be necessary to convey the property into joint names if it is held in one party's sole name.
[6] [2003] 2 FLR 285
[7] Mortimer v Mortimer-Griffin [1986] 2 FLR 315
[8] [2000] 2 FLR 855
[9] Ibid
[10] Ibid at 863
[11] Ibid
[12] Clutton v Clutton [1991] 1 All ER 340
[13] [2011] FCR 477
[14] Sawden v Sawden [2004] 1 FCR 776
[15] [1985] FLR 863
[16] Brown v Brown [1982] 3 FLR 161
[17] James v James [2010] EWCA Civ 445; Johnson v Johnson [2009] EWCA Civ 1530;  I v I [2008] All ER (D) 303 to name but a few.
[18] [2011] EWCA Civ 1056 [2011] 3 FCR 187 where the appeal was concerned with the extent to which the judge in ancillary relief proceedings should reflect the origin of the family assets, in this case a substantial damages award from a personal injuries claim. The Court of Appeal held that, the exceptional factor in the case, namely the origin of the family capital or the vast majority of the family capital, made it suitable for a Mesher order.