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Derhalli v Derhalli [2021] EWCA Civ 112

A husband’s unsuccessful second appeal in possession proceedings which depended upon the proper interpretation of a Consent Order in financial remedy proceedings.

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The husband was the sole legal and beneficial owner of the former matrimonial home ('the property'). A consent order provided for the property to be sold but did not express whether the wife could live in the property until the sale completed, or whether the husband could evict her or make her pay rent or damages for use and occupation whilst she remained living there.

In possession proceedings, the declaration of the first instance judge (HHJ Gerald) in favour of the husband was set aside and a fresh declaration made by Fancourt J allowing the wife to occupy the property until it was sold, paying all the outgoings related to the property but not paying occupation rent. Males LJ gave permission for a second appeal.

The issue on the second appeal was, "whether the judge erred in deciding that the reasonable reader, having all the background knowledge which was available to the parties, would have concluded that it was the intention of these parties that the wife would be permitted to remain living in the matrimonial home, rent free, until it was sold. If she was not, then the husband would succeed in his claim for damages." [3]

Background

After acrimonious financial remedy proceedings, a complex and lengthy consent order set out various agreements and undertakings in respect to the property. It was ordered that the property be sold and, following the sale, the husband was to make two lump sum payments to the wife.

The property was put on the market in June 2016, three months before the consent order was made, and the wife took responsibility for all the outgoings. Both parties expected a rapid sale near to the asking price of around £7 million. However, the high-end property market stalled following the outcome of the Brexit referendum. The property did not sell until March 2019 and for a sum of £5.9 million. The wife and the adult children lived at the property until it was sold. The order had made no provision as to occupation of the property pending its sale, although the wife had agreed to remove the protective notices registered against the property in her favour.

Judgment

King LJ, in her leading judgment, considered that disputes related to the interpretation of financial remedy orders should be put before the specialist Financial Remedy Court or a Family Division High Court Judge, under the powers of the Matrimonial Causes Act 1973. The husband should have applied to the Family Court to enforce or to vary the order rather than to bring possession proceedings in the County Court [23].

Regardless, King LJ affirmed that the County Court had the jurisdiction to determine the application. The judgement of Fancourt J was described as "unimpeachable" and applied the law correctly [67]. King LJ advised parties "to be specific as to the precise terms under which a party remains in occupation of a matrimonial home pending sale" [68].

All three judges agreed that the appeal should be dismissed. However, Asplin LJ and Arnold LJ left open the propriety of bringing a claim for possession in the County Court.

Case Summary by Dr Sara Hunton, Barrister, Field Court Chambers

For full case please see BAILII